Schroder US Equity Active UCITS ETF Listed on the LSE: Schroders Expands Its Range of European Active ETFs

Schroders is expanding its range of active ETFs in Europe with the listing of the Schroder US Equity Active UCITS ETF (ISIN: IE0003OZJ573) on the London Stock Exchange.

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Article created by the editorial staff of ETFWorld.co.uk

Tom Stephens, Head of ETFs, Schroders

ISIN: IE0003OZJ573 | TER: 0.20% | Structure: Schroder ETFs ICAV

The fund, with a Total Expense Ratio of 0.20%, aims to outperform the S&P 500 Index net of fees over a three- to five-year period by investing in equities and equity-related securities of North American companies.

The Context: Schroders Enters Europe with Active ETFs

Schroders’ debut in the European active ETF market dates back to September 2025, when the group listed the first ETF in its new European range on XETRA Deutsche Börse. The British asset manager already had a decade of experience in the sector, having launched its first active ETFs in Australia in 2016 and subsequently in the United States in partnership with Hartford Funds in 2018.

The products in the European range are structured with different share classes—in USD, GBP, EUR, and CHF—to meet the needs of investors across the continent. The Schroder US Equity Active UCITS ETF joins this family as the third product, at a time when benchmark-aware strategies represent the main source of demand for active ETFs in Europe, with higher-conviction strategies still in the development phase on the continent.

The Investment Strategy: Value and Quality in North American Equities

The fund is actively managed by Schroders’ Quantitative Equity Products (QEP) team, a unit with deep roots. The QEP team was founded in 1996 and has been managing assets since 2000; it is led by Justin Abercrombie with the support of an experienced group of senior investors, including Lukas Kamblevicius, Stephen Langford, and David Philpotts, based in London, Sydney, New York, and Hong Kong.

The Schroder US Equity Active UCITS ETF takes an approach similar to that of the Schroder QEP US Core Fund, managed by Lukas Kamblevicius, Co-Head of Schroders’ QEP team. The strategy aims to outperform the S&P 500 Index over a three- to five-year horizon through a quantitative framework based on Value and Quality, while keeping sector and stock deviations close to the benchmark.

The stock selection process is based on two key pillars:

Value: The manager examines metrics such as cash flow, dividends, and earnings to identify stocks that the market considers undervalued.

Quality: Indicators of profitability, stability, financial strength, structural growth, and corporate governance are analyzed.

The QEP team’s investment process uses quantitative tools to scale this fundamental approach, thereby accessing the best opportunities across a broad global universe of over 15,000 securities.

How the Fund Invests

The fund invests at least two-thirds of its assets in a diversified portfolio of equities and equity-related securities of North American companies. Specifically, eligible securities include common stock, preferred stock, REITs (both open-end and closed-end, within regulatory limits), ADRs, GDRs, EDRs, stapled securities, warrants, and rights. The latter are not actively purchased but may be acquired as a result of corporate transactions.

Up to one-third of the fund’s assets may be invested in short-term government securities, eligible UCITS—including money market funds and ETFs, subject to an overall limit of 10%—and time deposits with authorized banks, for liquidity management purposes.

The fund may use derivative financial instruments—stock index futures, forward exchange contracts, currency futures, and NDFs—exclusively to reduce risk and for more efficient portfolio management.

The fund also aims to qualify as an “Equity Fund” for German tax purposes by investing at least 50% of its gross asset value in equity securities.

Track record of the underlying strategy

The QEP US Core strategy has outperformed the S&P 500 on a cumulative basis over three-, five-, and ten-year time horizons. The objective is to deliver capital growth exceeding the S&P 500 (Net Total Return) net of fees over a three- to five-year period, with at least 80% of assets invested in equities and equity-related securities of U.S. and Canadian companies.

Costs: 0.20% TER

One factor that distinguishes the Schroder US Equity Active UCITS ETF from other active products in the same family is its cost: with a TER of 0.20%, the fund is positioned aggressively relative to the market. The Schroder Global Equity Active UCITS ETF—the global equity product in the same range, launched in September 2025—has an annual TER of 0.25%. The U.S. ETF is therefore five basis points cheaper, a positioning that reflects the growing competitive pressure in the active U.S. equity ETF segment, where the passive S&P 500 is available at near-zero costs.

The active ETF market in Europe: the race is on

Schroders’ launch comes amid growing competition in the European active ETF market, with firms such as Dimensional Fund Advisors, M&G Investments, Columbia Threadneedle, and Nordea also converting established strategies into ETF formats during 2025.

According to Morningstar data, over 1,400 active ETFs have been launched globally in the past five years, a pace outstripping both passive ETFs and mutual funds. The number of active ETFs in circulation is now comparable to that of passive ETFs.

Schroders, with over 220 years of history in active management and equity assets under management exceeding $300 billion, intends to capitalize on this opportunity in the active ETF segment to reach a broader client base: from institutional investors already familiar with QEP strategies through segregated mandates, to retail investors who can now access these strategies with a simple exchange order.

Tom Stephens, Head of ETFs, Schroders, commented:

“Reaching $2.8 billion in assets under management across our ETF range and ranking among the top ten UCITS active ETF managers demonstrates our ability to innovate, act quickly, and, above all, respond to the evolving needs of clients across different markets and geographies. The launch of the Schroder US Equity Active UCITS ETF expands our core equity offering, combining our expertise in active management with the flexibility, transparency, and accessibility that clients increasingly expect from ETFs.”

Lukas Kamblevicius, Co-Head of Schroders’ Quantitative Equity Products (QEP), Schroders, added:

“The U.S. equity market offers a broad and dynamic universe of opportunities, where a systematic and disciplined investment approach can help identify sources of consistent returns. This strategy—now available in the new ETF format—is designed to provide diversified exposure to U.S. equities, with the aim of delivering attractive long-term results for clients.”

Source: ETFWorld.co.uk