* Schroder International Selection Fund is referred to as Schroder ISF For Professional Investors or Advisors Only

Update on the Schroders Euro Corporate Strategy

Patrick Vogel, Head of European Credit

Zurich, February 20th 2013

Biography

1

Patrick Vogel

Head of European Credit, London

2012: Joined Schroders

2007: Legal & General Investment Management, Head of European Credit Portfolio

Management

2004: Deutsche Bank, Senior Portfolio Manager

2000: Frankfurt-Trust, Portfolio Manager

1999: Patrick Vogel Bankberatung, Frankfurt am Main, Consultant for banks in

treasury management, asset management & financial innovations

1996: Baden-Wurttembergischen Bank AG, Stuttgart, Global Trader

1994: M.M. Warburg & Co, Trader, Sales

1989 – 1994: Dipl-Kfm, Business Administration from Johann Wolfgang Goethe-

Universitat, Frankfurt am Main

Consistent hit ratio during both bull and bear markets:

Bull market: outperformed benchmark 86%*

Bear market: outperformed benchmark 87%**

Performance track record – Patrick at L&G Monthly Excess Returns (Up & Down Markets)

Source: Mercer. *Outperformed in bull market 30 out of 35 months. ** Outperformed in bear markets 21 out of 24 months

2

Performance track record – Patrick at L&G Cumulative Returns v Peer Group

Source: Mercer

Patrick Vogel

Top Quartile

Bottom Quartile

Median

Benchmark

(iBoxx Euro Corporate)

3

Performance track record – Patrick at L&G Tracking Error v Peer Group

Source: Mercer

4

Performance track record – Patrick at L&G Information Ratio v Peer Group

Source: Mercer

5

How I delivered performance at L&G

H2 2007/ H1 2008

Financial crisis was starting and the outlook for the economy was weakening mainly due to weakening

housing markets in the US and parts of Europe. Financial conditions were tightening quickly.

– Underweight financials and building materials

H2 2008/ Q1 2009

The Lehman failure was accelerating and deepening the global recession. Industrial activity more or

less stopped and risk assets got sold on distressed levels.

– Underweight financials and buying non-cyclicals in size

Q2 2009/ Q4 2009

The inventory cycle went too far so that a recovery of global activity was forecasted

– Neutral to long in financials and long non-financials

2010/2011

European sovereign crisis. Sustainability of governments is questioned as the aftershocks of the global

recession and the financial crisis are too big for some public balance sheets

– Switch from a sector focus in the portfolio construction to a country allocation focus

6

My approach to portfolio management

Integrated investment process

Broader team approach to investment management

Innovative and creative evolution of the investment process

Themes-based investment style

A formalised procedure that continually reviews the process to successfully deliver performance in

varying investment environments

A balanced portfolio construction

Aiming for consistent out-performance of the market by implementing different investment themes into

the strategy

Portfolio construction focuses on building low correlated alpha sources while minimising risk

Include offsets in portfolio construction to ensure not all themes are pointing in same direction

DTS as a portfolio construction and risk management tool

7

An integrated approach

Input factors: proprietary research

8

European Credit PM

Team

Quant Team

Global Credit Team

Credit Research

Team

Trading Desk

Macro Team

EMD Team

Equity Team

Multi-Asset &

Alternatives

Economist Team

Themes Tactical

Strategic

Thematic

9

Summary of investment process A global fixed income platform

Economists

Macro Team

EMD Team

Quant

Team

Regional

Teams

Credit

Team

Credit

beta

Security

Selection

Country

Duration

Curve

Strategic

Positioning

Thematic

Trades

Tactical

Trades

Formulating themes

Strategic Thematic Tactical

Horizon 6months +

1 month to 1 year Less than 1 month

Inputs Macro ‘roadmap’

External advisors

Technical analysis

Valuations

Fundamental trends

Brainstorming

Credit themes

Analyst sector presentations

Technical analysis

Data

Earnings news

Technicals

Sentiment

Any other themes

Meetings Quarterly Investment Forum

(“QIF”)

Monthly macro

Weekly rates and currencies

Weekly credit strategy

Weekly credit/PM meetings

Monthly credit meetings

Weekly Macro

Weekly themes

Weekly credit strategy

Weekly credit PM/analyst

Daily macro

Weekly macro

Weekly credit strategy

On desk discussion

10

My opportunity to implement an integrated credit management process

A global reach

A successful integrated framework requires a global resource base

The Credit Research team comprises of over 30 analysts in 8 cities across the globe

Well established distribution presence in Europe and beyond

Schroders has more depth in its distribution network than LGIM

Allows for better communication to clients and a better success of my work

Why I chose Schroders?

11

Significant resources dedicated to European credit

Source: Schroders as at January 2013.

12

Resource: Specialist Fixed Income Portfolio Management Teams

Multi Sector US Australia Asia (EM+DM) EMD Relative &

Latin America

Quant Research /

Systematic Macro

8 portfolio managers

and analysts

12 portfolio managers

and analysts

6 portfolio managers

and analysts

12 portfolio managers

and analysts

8 portfolio managers

and analysts

3 portfolio managers

and analysts

European Credit Research Americas Credit Research Asia & Australia Credit Research

Patrick McCullagh Jack Davis Richard Brown

8 credit analysts 14 credit analysts 10 credit analysts

European Credit Investment Team

UK Credit PM Euro Credit PM High Yield PM Global Credit PM Quantitative

Strategist Portfolio Analyst

Alix Stewart Patrick Vogel Konstantin Leidman Sarang Kulkarni Rajeev Shah Toby Kung

Divya Manek Michael Scott Lucette Yvernault

Global Team of 100+ including 50+ portfolio managers, 30+ credit analysts,

3 quantitative research specialists, 8 dealers

£9.3bn European Credit Team AUM

European Credit Team: Funds & Fund Managers

13

Source: Schroders as at 31st December 2012

*Data is sourced from Schroders FIA and is un-audited.

The data in this table refers to funds and segregated accounts run in London by Patrick Vogel, Alix Stewart, Konstantin Leidman, Divya Manek, Michael Scott, Sarang Kulkarni and

Lucette Yvernault.

31st December 2012* European Credit Team as at 31st December 2012

Team AUM £9.3bn

Number of Fund Managers 7

Number of Pooled Funds 10

Number of Segregated Accounts 18

270

290

310

330

350

370

390

410

430

450

RWE 4.625% Sept 2049

Themes implemented through security selection Bought RWE from 2 October 2012

14

Source: Bloomberg

Theme 1: Slowdown of

economic growth in China

Less demand for raw

materials

The price of coal falls, which

reduces input costs for coal

burning energy producers in

Europe.

The price of carbon permits

has fallen

Bought RWE (German utility)

Z - Spread

Spread has narrowed

Themes implemented through security selection Sold France Telecom, bought ESB Finance – 4 September 2012

15

Source: Bloomberg

Theme 1: Peripheral Europe

acts as a drag on the core

Cyclical sectors under

pressure as growth slows

Theme 2: Telecoms now

much more cyclical than they

used to be

Sold France Telecom (telco),

bought ESB (Irish electricity

distribution)

40

90

140

190

240

290

340

390

440

490

Sell FRTEL 3% 15 June 2022 Buy ESB 6.25% 11 September 2017

Z - Spread

ESB Spread lower

FRTEL spread slightly wider

Themes implemented through security selection Buy Fonciere Lyonnaise – 28 November 2012

16

Source: Bloomberg

Theme: Unintended

consequences of quantitative

easing

QE has fuelled inflation

amongst risk assets

Bought Fonciere Lyonnaise

3.5% 2017. The company

specialises in the rental of

prime business and retail

property in Paris. 170

180

190

200

210

220

230

Buy Fonciere Lyonnaise 3.5% 28/11/2017

Z - Spread

FLYFP Spread Tighter

Sector Allocation

Schroder ISF EURO Corporate Bond

17

Positioning

Source: Schroders, Bank of America Merrill Lynch. The benchmark is the Bank of America Merrill Lynch EMU Corporate. Based on un-audited data as at 31 January 2013.

*Fund issuer number treats each CDS index as a single issuer and excludes the non-credit line items (Futures Fixed Income, Margin Cash Balance, SYN, Synthetic Cash Fixed

Income, Currency).

(i.e. the one year half life) and the unweighted TE gives equal weighting to the whole history of observations.

Fund Benchmark

Assets under

management €3.6 billion €1.6 trillion

Effective Yield 2.8% 2.3%

OAS +176.5 +143.8

Effective Duration 4.4 4.2

Number of issuers* 220 401

Average Credit

Weighting A- A-

Fund Beta 1.46

(as a percentage of the benchmark’s DTS)

Sector Allocation Breakdown for Industrials in the Fund

Schroder ISF EURO Corporate Bond

18

Positioning in Industrials

Source: Schroders, Bank of America Merrill Lynch. Breakdown of Industrials in the fund by MLX level 3. Based on un-audited data as at 31 January 2013

%

Schroder ISF EURO Corporate Bond

19

Rating breakdown

Source: Schroders / Bank of America Merrill Lynch/ Fixed Income Analytics as at 31 January 2013, Based on un-audited data.

*Bank of America Merrill Lynch EMU Corporate Index (Bloomberg ticker: ER00 Index).

**Cash etc includes cash and unrealised derivative P&L

Ratings by average of S&P, Moody’s and Fitch.

%

Schroder ISF EURO Corporate Bond

20

Country breakdown

Source: Schroders / Bank of America Merrill Lynch as at 31 January 2013, Based on un-audited data.

This will not add to 100 since countries with negligible exposure (>0.25%) have been left out.

* Bank of America Merrill Lynch EMU Corporate index (Bloomberg ticker: ER00 Index).

**Cash etc includes cash and unrealised derivative P&L

%

These issuers disappeared from the top 20 in January

Top 20 Issuers at end August 2012 Top 20 Issuers at end January 2013

Schroder ISF EURO Corporate Bond Evolution of the portfolio: Top 20 issuers in August and December

21

Source: Schroders FIA as at 31 January 2013, Based on un-audited data. The above is for information only and is not a recommendation to buy or sell.

Largest issuers in the benchmark by market value (%) (including single name CDS but excluding bunds & CDS indices).

Name MV(%)

RWE AG 2.93

Cooperatieve Centrale Raiffeisen-Boerenleenbank 2.79

Societe Generale SA 2.34

BPCE SA 2.17

SpareBank 1 SR Bank ASA 1.96

SSE PLC 1.94

SAP AG 1.80

Co-Operative Bank 1.70

Intesa Sanpaolo SpA 1.69

Electricite de France SA 1.68

France Telecom SA 1.66

Credit Agricole SA/London 1.49

Ireland Government Bond 1.48

Snam SpA 1.46

Anheuser-Busch InBev NV 1.37

AT&T Inc 1.32

PPR 1.30

Gas Natural Capital Markets SA 1.19

UniCredit Bank Austria AG 1.18

Banco Popolare SC 1.17

New issuers appearing in the top 20 in January

Name MV(%)

Cooperatieve Centrale Raiffeisen-Boerenleenbank 3.60

Royal Bank of Scotland PLC 1.85

ING Bank NV 1.62

Intesa Sanpaolo SpA 1.61

Electricite de France SA 1.48

Nordea Bank AB 1.40

BNP Paribas SA 1.32

GE Capital European Funding 1.26

Barclays Bank PLC 1.10

Citigroup Inc 1.07

Credit Suisse AG/London 1.03

DnB Bank ASA 1.03

Telefonica Emisiones SAU 1.02

Deutsche Telekom Intl. Finance BV 0.97

Societe Generale SA 0.94

E.ON International Finance BV 0.94

France Telecom SA 0.92

BPCE SA 0.90

Bank of America Corp 0.89

ABN Amro Bank NV 0.88

Delivering on our promises: consistent performance Performance attribution

22

Source: Schroders, based on end of day market prices.

Date Fund Return Index Return Excess Return

September-12 0.92% 0.70% 0.21%

October-12 1.18% 1.05% 0.13%

November-12 1.12% 0.89% 0.23%

December-12 1.09% 0.86% 0.23%

January-13 -0.97% -1.17% 0.20%

Total 3.37% 2.34% 1.03%

Date ALPHA

(bps)

FX

(bps)

DURATION

(bps)

YIELD

CURVE

(bps)

INFLATION

FACTOR

(bps)

VOLATILITY

(bps)

SOVEREIGN

(bps)

CARRY &

ROLL

SOVEREIGN

(bps)

CARRY &

ROLL

CREDIT

(bps)

CREDIT

SECTOR

ALLOCATIO

N (bps)

CREDIT

SELECTION

(bps)

CREDIT

ABS/MBS

SPECIFIC

(bps)

VALUATION

(bps)

TRADING

(bps)

Sept-12 21 0 0 1 2 0 0 -2 -5 10 10 0 0 6

Oct-12 13 0 0 0 0 0 0 2 -5 32 -14 0 0 -1

Nov-12 23 0 0 1 0 0 1 1 -4 11 3 0 -1 12

Dec-12 23 0 -3 3 0 0 1 1 -2 27 -7 0 -1 4

Jan-13 20 -1 3 0 0 0 3 0 -1 -1 10 0 0 7

Total 103 -1 -1 5 2 0 5 2 -17 80 2 0 -3 28

Macro roadmap

23

Shorter Term Factors – Goldilocks, Economic surprises no longer toppy

USA – expectations for a pick up in growth, recent data not matching high hopes. PMIs look good but

not IP and lead indicators, through GrIP turning up. Housing is better and there is pick up in credit.

Europe – near term expectations low, but longer time high. Could continue to surprise near term based

on PMI momentum and lead indicators. IP and GrIP disagree. France and Germany go different ways

in IP. FX is a drag for exports.

UK seems to go sideways. Consumer improving, but growth (services, IP) stalling.

Asia: China – Momentum picking up, but rotation from investment into consumption needed to sustain

longer term. Infrastructure stimulus leads to increase in debt (potentially bad). Korea and Taiwan data

are good.

Long Term Factors – US politicians think the new trend growth is below 2%. Economic cycle is 3.5yrs old

now. More risk to be derailed by a shock (oil, cliff, EM wobble, disorderly Fed exit) rather than excesses of

credit or capacity.

Unemployment remains elevated And continues to rise in peripheral Europe

24

Source: Thomson Reuters Datastream, Schroders, Updated 21/12/2012

Most of the fall in US

unemployment due to

people leaving the

workforce

Unemployment Rate

Consumption remains weak

25

Source: Thomson Reuters Datastream, Schroders, Updated 21/12/2012

Where will the growth come from?

Outside of the US,

consumption has failed to

gain traction

Real personal consumption

BE500 RoE versus capex: sales ratio S&P500 RoE versus capex: sales ratio (adj)

Corporate Fundamentals

26

Source: Bloomberg, Schroders

Fiscal deficits remain a worry There is a lot more work to be done

27

2012 data is Bloomberg forecast

Source: Bloomberg, Schroders. 21st December 2012.

-16

-12

-8

-4

0

4

2004 2005 2006 2007 2008 2009 2010 2011 2012 (estimate)

US UK Germany France Italy Spain Ireland

Budget balance (% GDP)

Ireland goes

down to -30.9%

Spanish loan delinquencies are very high 3 year G7 government bond yields

28

Source: Bloomberg to 3 January 2013

Over 11% of Spanish bank

loans have gone bad

Propping up bad banks

does nothing to stimulate

the economy

CDS rally since the ECB’s

OMT programme

Central Bank rates are very low G5 Central Bank rates

29

Source: Bloomberg to 31 December 2012

Interest rates remain at

emergency levels

Central Bank actions have

helped to contain financial

market volatility

Is monetary policy spurring

growth or is economic

growth just surviving on life

support?

It does mean that cash is

still not a viable investment

option

Velocity of M2 Money Stock (Shaded Areas signify US recessions)

Is QE working? Monetary policy effectiveness

30

Source: St Louis Fed

Government bonds yields are very low 3 year G7 government bond yields

31

Source: Bloomberg to 3 January 2013

No evidence to indicate a

major shift in government

bond yields is likely

Government bonds ensure

real loss of value so

investors still have to look

at other alternatives

3 year G7 Government Bond Yields

Yields at record low levels Spreads largely close to initial peripheral sov

concerns

Liquidity driven rally

32

Where to find yield?

Yields as of 10-Jan-13 – Non-Fins single-A (2.06%), Non-Fins BBB (3.02%), HY BB (5.05%), HY B (7.83%)

Source: iBoxx

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

Recession USD IG corporates USD HY (RHS)

Oil patch trough

Steel industry meltdown

Barbarians at the gate

S&L crisis

Tequilla crisis Asian currency crisis

Banking/brokerage liquidity crunch

Russian defaultLTCM

9/11

Telecom/tech bust

Accounting scandals

GM downgrade

Enron

Subprime / Credit crunch

Bear Stearns collapse/rescue

Lehman collapse

TARPannounced

Eqty rally

Peripheral Sov concerns

QE2

LTRO

0

5

10

15

20

25

30

Aug-06 Jun-07 Apr-08 Feb-09 Dec-09 Oct-10 Aug-11 Jun-12

HY B HY BB Non-Fins BBB Non-Fins A

Sen Fins converging to single-A non-fins SenFins trade rich vs. EuroStoxx Banks

Senior Financials – strong technicals persist

33

Supported by large net negative issuance

Senior Financials that trade above non-fins BBB last year has tightened by nearly 200bp from its recent peak in Nov-11. Now at the bottom of range, spread differential to non-fins

single-A is only 14bp.

Source: Bloomberg, iBoxx, Data as of 10-Jan-13

100

150

200

250

300

350

400

60 80 100 120 140 160 180 200 220

iTra

xx

Se

nF

ins

EuroStoxx 600 Banks (SX7E)

1mnth

Current

2mnth - 3mnth

4mnth - 6mnth

7mnth - 2yrs

0

50

100

150

200

250

300

350

400

450

Jan-07 Nov-07 Sep-08 Jul-09 May-10 Mar-11 Jan-12 Nov-12

Banks Senior - € Non-Financials A - € Non-Financials BBB - €

Spread differential has remained flat on the

back of growth uncertainty

Utilities vs cyclicals and non-cyclicals

Cyclicals vs. Non-Cyclicals

34

Source: ML, Data as of 10-Jan-13

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

-10

0

10

20

30

40

50

60

70

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Consumer Cyclical - € vs. Consumer Non-Cyclical - €

Diff Ratio (rhs)

-20

0

20

40

60

80

100

120

140

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Utilities - € vs. Consumer Non-Cyclical - € Utilities - € vs. Consumer Cyclical - €

Non-Financials £ vs. € Insurance subordinated £ vs. €

GBP credit continues to look more attractive

35

£ subordinated insurance trades 35bp above € subordinated insurance. iBoxx £ sub insurance LT2 at asw+346bp versus iBoxx € sub insurance LT2 at asw+309bp

Source: iBoxx

0.8

0.9

0.9

1.0

1.0

1.1

1.1

1.2

1.2

-130

-80

-30

20

70

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13

Insurance Subordinated - £ vs. Insurance Subordinated - €

Diff Ratio (rhs)

-50

-30

-10

10

30

50

70

90

110

Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12

7-10yr BBB - £ vs. € 7-10yr single-A - £ vs. €

GBP cheaper

EUR cheaper

Non-Financials spreads look at fair value Utilities still offer room to tighten

Credit Fundamentals Is leverage on the rise – albeit slowly?

36

0

50

100

150

200

250

300

1.3

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12

IG Non-Fins

IG Non-Fins spread (ASW)

Net debt/EBITDA

0

20

40

60

80

100

120

140

160

180

200

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12

Utilities Utilities (ASW)Net debt/EBITDANet debt/EBITDA

Based on aggregated data for around 160 European IG non-financials. Data up until end of Q3 2012 for Net debt/EBITDA. Spread data till 10-Jan-13

Source: Bloomberg, Schroders

Financials CDS appear rich to equities Non-Fins CDS appear fair value to equities

Different valuations across asset classes

Source: EuroStoxx, as at 10th January 2013

37

100

150

200

250

300

350

400

60 110 160 210

iTra

xx S

en

Fin

s

EuroStoxx 600 Banks (SX7E)

1mnth

Current

2mnth -3mnth

4mnth -6mnth

7mnth -2yrs

70

90

110

130

150

170

190

210

210 230 250 270 290 310

iTra

xx N

on

Fin

s

EuroStoxx 600

1mnth

Current

2mnth -3mnth

4mnth -6mnth

7mnth - 2yrs

Opportunities in European credit Divergence in once correlated sectors provide opportunities for investors

Source: Bloomberg / Bank of America Merrill Lynch Global Index System (EN00;EB00; ENCC; ENCD) as at 31 December 2012

38

0

100

200

300

400

500

600

12

/31

/199

6

08

/31

/199

7

04

/30

/199

8

12

/31

/199

8

08

/31

/199

9

04

/30

/200

0

12

/31

/200

0

08

/31

/200

1

04

/30

/200

2

12

/31

/200

2

08

/31

/200

3

04

/30

/200

4

12

/31

/200

4

08

/31

/200

5

04

/30

/200

6

12

/31

/200

6

08

/31

/200

7

04

/30

/200

8

12

/31

/200

8

08

/31

/200

9

04

/30

/201

0

12

/31

/201

0

08

/31

/201

1

04

/30

/201

2

12

/31

/201

2

Euro Non-Financial Euro Financial Corporates

OA

S (

in b

ps)

0

50

100

150

200

250

300

350

400

450

12

/31

/199

6

08

/31

/199

7

04

/30

/199

8

12

/31

/199

8

08

/31

/199

9

04

/30

/200

0

12

/31

/200

0

08

/31

/200

1

04

/30

/200

2

12

/31

/200

2

08

/31

/200

3

04

/30

/200

4

12

/31

/200

4

08

/31

/200

5

04

/30

/200

6

12

/31

/200

6

08

/31

/200

7

04

/30

/200

8

12

/31

/200

8

08

/31

/200

9

04

/30

/201

0

12

/31

/201

0

08

/31

/201

1

04

/30

/201

2

12

/31

/201

2

Euro Periphery Non-Financial

Euro Non-Periphery Non-Financial

OA

S (

in b

ps)

€ Non-Financials vs Financial Corporate Spreads € Periphery Non-Financials

vs Non-Peripheral Non-Financial Corporate Spreads

Investment conclusions

39

It is difficult to argue that we are near to self sustaining growth

It is easier to argue many of the early warning signs of a growth problem are building

Asset prices have been inflated by monetary accommodation / QE

But questions remain over its efficacy going forward

Companies at the top of the earnings cycle. Companies will struggle to grow earnings if

they can’t cut costs more, and cash distributions to shareholders eat into capex and cash

Equities are vulnerable

Cash and government bonds offer no value and no sign of that changing

Credit still offers a viable investment alternative for investors in a slow growth environment

However, after the recent rally, alpha generation will be the key to unlock returns

Aim: Continue to be the superior information ratio provider in credit

Conclusion

40

Experienced lead portfolio managers with strong track records through bull and bear

cycles

Support from a large globally-based credit research team

Integrated investment framework that maximises skills from the global fixed income

group (e.g. macro, EMD, quant, equity team etc.)

Themes-based portfolio construction

Resolute focus on delivering consistent outperformance over the cycle

Appendix

Fund profile: Schroder ISF EURO Corporate Bond

*This is not a complete set of fund rules and represents the typical internal, non mandatory limits under which the fund is managed

Please note that such limits may be deviated from and are subject to change without notice.

42

Fund Managers: Patrick Vogel & team

Peer Group: Micropal Fixed Income EUR-corporate bond

Benchmark: Bank of America Merrill Lynch EMU Corporate index (Bloomberg ticker = ER00 Index)

Aim: To consistently outperform the market, leading to competitive peer group performance over the market cycle

Style:

A fully integrated global fixed income platform combining expertise across all fixed income sectors

Top down research identifying themes driving all fixed income sectors

Multiple themes applied though credit selection into diversified credit strategies

Emphasis on disciplined and rigorous credit research

Guidelines*:

Maximum 10% in cash; maximum 20% in cash and government bonds

Maximum of 20% in total in High Yield or in Emerging Market Debt or in Convertibles

Maximum 20% in non Euro denominated assets

Hedged 100% to Euro

Overall portfolio duration: Benchmark +/- 2 years

Derivatives used include: currency forwards, interest rate futures, interest rate swaps,

and credit default swaps

2x limit on fund value-at-risk relative to benchmark value-at-risk (including all derivatives)

Max 50% in long risk or short risk CDS positions

No limits on sectors or ratings

Performance: Schroder ISF EURO Corporate Bond

43

At 31 January 2013 1 month 3 months 1 year 3 years (p.a) 5 years (p.a)

Fund Return -1.07 0.75 8.53 3.89 5.24

Peer Group Average Return -0.89 0.83 8.16 4.62 4.32

Difference -0.21 -0.08 +0.37 -0.72 +0.92

Quartile Ranking* 2nd 2nd 2nd 4th 2nd

Source: Schroders, Morningstar

Morningstar data as at 31/01/13 using A-Acc share class returns, Bid-bid, Basic Rt Tax. Peer group sector: EUR-corporate bond.

Schroder ISF EURO Corporate Bond (%)

Buys v Sells Performance of 1s v 2s v 3s v 4s

We have improved our stock specific research capability Schroders Analyst Research Methodology (ARM) since start of system in 2011

44

Source: Schroders

Schroders' Credit Analysts

45

Source: Schroders as at 31st December 2012

*Indicative only, the mix of ratings in the fund and benchmark will vary over time.

31 Corporate Credit Analysts

12 in New York

7 in London

4 in Singapore

3 in Sydney

1 in Jakarta

1 in Philadelphia

1 in Tokyo

1 in Hong Kong

1 in Buenos Aires

1 – rated corporates

2 – rated corporates

3 – rated corporates

4 – rated corporates

Corporates not rated by analysts

Other

Total

Fund

19%

37%

25%

2%

6%

11%

100%

Benchmark

11%

34%

35%

6%

12%

2%

100%

Activity in H1 2012

1,449 live in person/telephonic meetings

1,533 reports/comments produced

Recent Ratings Mix (in %)*

(Other: sovereigns, quasi-sovereigns, cash, etc.)

Cash & sovereign exposure CDS exposure

Schroder ISF EURO Corporate Bond Position history

Source: FIA, as at 31 January 2013. Based on un-audited data.

46

Interest rate duration vs benchmark High Yield Exposure

% %

Years %

VaR of fund / Var of Benchmark

Value at Risk (VaR) using Barclays Point

Source: Schroders, Barclays Capital Point. VaR Limits from 20 July 2007 – 31 January 2013. Based on un-audited data.

47

0.0

0.5

1.0

1.5

2.0

2.5

Ju

l-0

7A

ug

-07

Se

p-0

7O

ct-

07

No

v-0

7D

ec-0

7Ja

n-0

8F

eb

-08

Ma

r-0

8A

pr-

08

Ma

y-0

8Ju

n-0

8Ju

l-0

8A

ug

-08

Se

p-0

8O

ct-

08

No

v-0

8D

ec-0

8Ja

n-0

9F

eb

-09

Ma

r-0

9A

pr-

09

Ma

y-0

9Ju

n-0

9Ju

l-0

9A

ug

-09

Se

p-0

9O

ct-

09

No

v-0

9D

ec-0

9Ja

n-1

0F

eb

-10

Ma

r-1

0A

pr-

10

Ma

y-1

0Ju

n-1

0Ju

l-1

0A

ug

-10

Se

p-1

0O

ct-

10

No

v-1

0D

ec-1

0Ja

n-1

1F

eb

-11

Ma

r-1

1A

pr-

11

Ma

y-1

1Ju

n-1

1Ju

l-1

1A

ug

-11

Se

p-1

1O

ct-

11

No

v-1

1D

ec-1

1Ja

n-1

2F

eb

-12

Ma

r-1

2A

pr-

12

Ma

y-1

2Ju

n-1

2Ju

l-1

2A

ug

-12

Se

p-1

2O

ct-

12

No

v-1

2D

ec-1

2Ja

n-1

3

Fund Relative VaR Relative VaR Limit Benchmark VaR = 1

The views and opinions contained herein are those of the fund manager, and may not necessarily represent views

expressed or reflected in other Schroders communications, strategies or funds.

Risk warning: Investments in debt securities are primarily subject to interest rate, credit and default risks and, potentially, to currency

exchange rate risk. This fund may use financial derivative instruments as a part of the investment process. This may increase the

fund’s price volatility by amplifying market events.

Important Information: This presentation does not constitute an offer to anyone, or a solicitation by anyone, to subscribe for shares

of Schroder International Selection Fund (the “Company”). Nothing in this presentation should be construed as advice and is therefore

not a recommendation to buy or sell shares.

Subscriptions for shares of the Company can only be made on the basis of its latest prospectus together with the latest audited annual

report (and subsequent unaudited semi-annual report, if published), copies of which can be obtained, free of charge, from Schroder

Investment Management (Luxembourg) S.A.

An investment in the Company entails risks, which are fully described in the prospectus.

Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as

rise and investors may not get the amount originally invested.

This presentation is issued by Schroder Investment Management Limited, 31, Gresham Street, EC2V 7QA, who is authorised and

regulated by the Financial Services Authority. For your security, all telephone calls are recorded.

Important information

48