Schroder Global Series Trust N-CSRCertified annual shareholder report (management investment company)

The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its report on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC’s website at http://www.sec.gov, and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Except as otherwise specifically stated, all information and investment team commentary, including portfolio security positions, is as of October 31, 2020. The views expressed in the Management Discussion and Analysis sections (the “MD&As”) are those of the respective Fund’s portfolio manager(s) and are subject to change without notice. They do not necessarily represent the views of Schroder Investment Management North America Inc. (“SIMNA”). The MD&As contain some forward-looking statements providing current expectations or forecasts of future events; they do not necessarily relate to historical or current facts. There can be no guarantee that any forward-looking statement will be realized. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. Any discussions of specific securities should not be considered a recommendation to buy or sell those securities. A Fund may buy, sell, or hold any security discussed herein, on the basis of factors described herein or the basis of other factors or other considerations. Fund holdings will change.

Performance quoted represents past performance and does not guarantee or predict future results. Investment return and principal value will fluctuate, so shares, when redeemed, may be worth more or less than their original cost. Please keep in mind that any double digit returns are highly unusual and cannot be sustained. Fees and expenses are factored into the net asset value of your shares and any performance numbers we release. Total return figures reflect expense limitations in effect during the periods shown; without such limitations, the performance shown would have been lower. Performance results assume the reinvestment of dividends and capital gains. The return figures shown do not reflect the deduction of taxes that a shareholder may pay on Fund distributions or the redemption of Fund shares. Current and month-end performance and other information, which may be lower or higher than that cited, is available by contacting SIMNA at (212) 641-3800 and is periodically updated on our website: www.schroderfunds.com.

For the twelve-month period ended October 31, 2020, the Schroder North American Equity Fund (the “Fund”) gained 7.45% (Investor Shares), compared to the S&P 500 Index (the “Index”), a market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ, which rose 9.71% during the same period.

The developments surrounding the COVID-19 pandemic dominated the market environment for much of the one-year period through October 31, 2020. Prior to the advent of COVID-19, the final months of 2019 were sanguine, with progress around Brexit and a “phase one” deal in the US-China trade conflict driving positive market performance. However, in Q1 2020, the COVID-19 pandemic’s paralyzing impact on large sectors of the world economy was the catalyst for a violent correction in US equity markets. In addition, a stand-off between Saudi Arabia and Russia and the consequent breakdown in OPEC supply restraints battered oil markets, all the more so because it coincided with a collapse in demand. As a result, the February market correction continued into March, with stock markets experiencing one of the sharpest sell-offs in recent history. The swift response from governments in terms of fiscal stimulus, combined with aggressive monetary easing and other unconventional policies, offered support.

During Q2 2020, the slowing rate of growth in COVID-19 cases and the phased reopening of major world economies, as well as extraordinary levels of stimulus from central banks and governments globally, drove a strong recovery in US equities from their Q1 losses. However, in the final few weeks of the quarter, signs of an acceleration in the number of COVID-19 cases in some countries, including the United States, raised concerns about the continued path of recovery in the second half of the year.

Despite a widespread correction during September, economies continued to recover in Q3 from their post-lockdown lows thanks to optimism around a vaccine, government support measures, and the ongoing broadly positive economic news-flow. While there was some rotation between winners and losers during the quarter, the key theme by far was a continuation in leadership of the large cap growth winners. In October, however, US equities weakened again. Positive gains across markets over the first few weeks of the month were wiped out in its final days, as market volatility spiked in response to a resurgence of COVID-19 cases and new restrictions in Europe and the US, as well as the uncertainty surrounding both a delayed fiscal stimulus and the upcoming elections in the US.

From a style perspective, investors appear to have maintained their preference for Growth and Momentum stocks, as evidenced by the strength of ongoing US technology and consumer stocks, while more cyclical sectors like energy and financials languished. The MSCI US Value Index lagged the MSCI US Growth Index by an extraordinary 42% over the twelve-month period in review, with Momentum and Quality also outperforming. Market breadth remained at extreme lows, with large caps far outstripping mid and small, and a massive concentration of performance seen in the FANMAG+ names.

Against this backdrop, the Fund underperformed the benchmark. The main detractor, accounting for nearly 75% of underperformance, was the Fund’s underweights in technology (Nvidia, Apple, Advanced Micro Devices, Salesforce). The second largest detractor was communication, driven by an underweight to Netflix and overweights to Omnicom and Verizon. Overweights in financials (life and health insurance and asset management) were another headwind, as names like Aflac, American Financial, Unum and Franklin struggled in a risk off environment. Finally, over the full year period, overweights to pharmaceuticals and health providers, including Merck, Biogen and Quest, were also a headwind.

On the other hand, the Fund saw material positive contributions from underweights in industrials, including names such as Boeing, GE, Raytheon, Lockheed Martin, Northrop Grumman and General Dynamics, as well as United Airlines, Southwest Airlines and American Airlines. Energy was another positive contributor, via underweights to a variety of oil & gas companies, such as Exxon, Schlumberger and Occidental. Underweights broadly across utilities also contributed, as did good stock selection in consumer discretionary (e.g., overweights to Ebay and to US homebuilders like DR Horton and Pulte; underweights to the retail, hotel and leisure industries, like Booking, Expedia, Marriott, Royal Caribbean and Norwegian; and underweights to automakers such as GM).

Our focus on value and quality, as the two key drivers of long-run equity returns, aims to offer diversification in varying market environments. We believe that exercising a preference for better-valued stocks with superior financial strength (particularly robust balance sheets), greater stability in their earnings, and strong governance standards will continue to drive outperformance over the long run.

We continue to find opportunities that we believe are attractively valued and high-quality across the market, especially because such a broad swath of the market has been neglected, in our view, while investors focus on a small set of glamour stocks. One of the Fund’s most significant exposures remains in health care, particularly pharmaceuticals, which we believe is the best example of an industry offering both value and quality. We also have a higher-than-Index allocation to consumer staples (particularly home products and food & drink) and consumer discretionary (especially homebuilders). We remain underweight in utilities (especially electric utilities) as we find most of these companies are highly leveraged and unattractive from a valuation perspective. We are also underweight to banks, industrials (especially defense & aerospace) and materials.

Looking ahead, we anticipate that, given continued uncertainly, we could again see heightened levels of market volatility, and we believe that our process works well in providing us the flexibility to lean against the wind when we feel that prices have overreacted, thereby creating opportunities for active management to generate alpha. In the final months of the period under review, we have added to positions within cyclical sectors, without compromising our preferred business quality lens, in order to capitalize on a future economic recovery.

For the twelve-month period ended October 31, 2020, the Schroder Core Bond Fund (the “Fund”) returned 8.34% (R6 Shares) and 8.31% (Investor Shares) compared to the Bloomberg Barclays US Aggregate Bond Index (the “Index”), which returned 6.19% during the same period.

It’s hard to recall what the market environment looked like in October 2019 given all that has happened since. Geo-political risks driven by a trade war with China and Brexit negotiations were the main themes with hints of the destruction due to the Coronavirus only appearing in January 2020. What started as a quiet rumble turned into a loud roar by the end of the first quarter as the spread of COVID-19 outside of China roiled markets. Fears of a global pandemic resulted in a material risk-off event as evidenced by the sell-off in risk assets and the massive rally in safe-haven yields. Equity markets faired particularly poorly after having just reached historical peaks (the Dow saw the biggest weekly point drop ever, falling over 3500 in the last week of March). Investment grade corporates, especially high yield corporates also saw material repricing. Globally, markets reacted in a similar fashion as investors were left to consider the magnitude and duration of the virus’s economic damage due to quarantines, school closures, travel bans and other fallout. At the time, the scope and breadth of the impact on global supply chains was unknown and with many issuers releasing warning on earnings, investors decided it was time to shed risk.

The markets rebounded significantly in April on the backs of massive amounts of stimulus and support from global central banks. Encouraging developments relating to COVID-19, which included slowing rates of new infections and deaths, also contributed to the positive market sentiment, as did positive headlines surrounding clinical trials. All of this transpired in the face of negative economic news of historical significance including GDP shrinking 4.8%, the first contraction since 2014 and the biggest drop since 2008; nearly 30 million unemployed since late March; and a route in the price of oil given a global supply glut. The divergence between domestic equities (S&P up 12.7% over the month) and other risk assets along with a very uncertain economic future, left some investors wondering if the market was getting ahead of itself. Certainly, the Treasury market was not on the same page as equities as evidenced by the persistently low yields across maturities.

Throughout the second and third quarters the market continued to rebound with modest but steady improvement in economic data, reassurance from global central banks and improvement in case counts globally. Then, late in the third quarter, risks began to rise again due to the November US Presidential election and the threat of an unknown or prolonged outcome. By the end of October 2020, however, the positive risk-on tone returned as markets began to price in a high probability of a Biden victory. As compared to the beginning of the reporting period, spreads were actually 15 basis points (“bps”) wider at the end of the reporting period (as measured by the Bloomberg Barclays Corporate Bond Index), and excess returns to Treasuries (-87 bps) were negative. Despite this, the strategy was able to beat the benchmark materially as described below.

The Fund outperformed the Index for the twelve-month period ending October 31, 2020 by 215 bps, before taxes and fees. Sector selection was the main factor impacting performance given the dramatic tightening of spreads witnessed in the last six months of the period. Issue selection was also positive, although to a lesser degree. The Fund’s overweight to corporates, both industrials and financials, was the main factor. In addition, there were smaller positive contributions from the allocation to securitized assets and utilities. Within corporates, the overweight allocations to banking, technology and consumer non-cyclicals had the largest impact, followed by the overweight allocations to insurance and communications. The overweight to taxable municipals detracted, as did the exposure to Commercial Mortgage-Backed Securities (“CMBS”). Although the impact was small relative to other sector allocations. Positive issue selection was also the result of corporates, predominantly industrials, with contributions from financials to a lesser extent. Specific technology bonds were the largest contributors, with additional contributions from consumer non-cyclical, communications, and banking. Notably, much of the Fund’s outperformance occurred during the first and second quarters of 2020 as the Fund reduced risk prior

to the onset of COVID-19 and subsequently was able to take advantage of favorable valuations in corporate bonds once the market sold off at the end of March. Issue selection was also a material positive contributor, driven primarily by specific industrials, although financials made a positive contribution as well. Within corporates, technology, consumer non-cyclicals and insurance were the primary sources of issue selection, which more than offset the detraction from taxable municipals. Yield curve and duration at the top line were modestly positive as the negative curve impacts offset the positive duration impacts. We believe this is more the result of the sector allocations (i.e. underweight to Treasuries) than an expressed view on the direction of interest rates.

Looking forward, we believe there are several uncertainties that may lead to further volatility, including the timing and magnitude of additional fiscal stimulus, COVID-19 vaccine distribution, and the possibility for further COVID-19 case surges as the weather cools across most of the US. While short-term uncertainties remain high, we believe the recovery will continue and significant fiscal stimulus will materialize in 2021. Our view is that this, combined with a continued recovery in labor markets, ongoing support from the US Federal Reserve (the “Fed”), and the tailwinds from a weaker dollar and oil, will create a favorable dynamic for both growth and risk assets.

So where does that leave our asset allocation? We entered this year with the most defensive asset allocation we have seen in a number of years across the desk. Fast forward to March, and spreads in most fixed income sectors moved to the cheapest levels in decades, barring a couple of months during the financial crisis. We added a significant amount of risk over the last couple of quarters, particularly in credit markets, taking advantage of some of the most attractive valuations we have seen in years. This meant reducing positions in more defensive securitized sectors and Treasuries and increasing exposures to Investment Grade credit, High Yield corporates, taxable municipals and to a lesser extent Emerging Markets. This has worked well, as riskier fixed income sectors, following significant losses in the first quarter, have recovered over 80% of their losses through the support of substantial intervention from the Fed.

Despite the significant recovery in valuations across credit markets, with the Fund’s portfolio has a risk posture significantly higher than 12 months ago. We believe that a gradual economic recovery, an accommodative Fed and close to zero yields on cash and short Treasuries means the support for yield should remain robust. The Fund’s largest overweight remains in Investment Grade credit, which we believe benefits the most from central bank support. In the absence of a dramatic change in current valuations or significant deterioration in the economic backdrop, we expect this to persist.

In addition to an increased corporate credit exposure for the Fund, we have also begun to see value in the taxable municipal market, which we believe has lagged the sharp rally in corporate valuations, particularly in revenue bonds where valuations appear attractive to us relative to fundamentals. Finally, within the securitized space we have recently started to rebuild exposures to Agency Mortgage-Backed Securities (“MBS”), which we had sold earlier in the year, and to maintain a structural exposure to AAA-rated Collateralized Loan Obligations (“CLOs”) which we believe offer an attractive combination of yield and security.

With respect to rates, the current official policy is that rates will remain at zero through 2022. With ongoing aggressive intervention from the Fed and a concerted campaign of financial repression, we believe rates will remain low and in a fairly defined range for the foreseeable future. While the volume of issuance the Treasury has to undertake may create a slight steepening bias to curves, we believe any material move steeper would likely induce further intervention from authorities.

Despite the recovery in spreads over the last two quarters, we believe that significant opportunity remains across US fixed income. Valuations in credit and certain securitized sectors still remain more attractive than they have for a number of quarters. We believe volatility will remain high but that an absence of yield globally and aggressive central bank and fiscal support will ultimately be beneficial to fixed income valuations.

For the twelve-month period ended October 31, 2020, the Schroder Long Duration Investment-Grade Bond Fund (the “Fund”) returned 13.63% (Investor Shares), compared to the Bloomberg Barclays Long Government/Credit Bond Index (the “Index”), a broad-based basket of debt securities, which returned 11.20% during the same period.

It’s hard to recall what the market environment looked like in October 2019 given all that has happened since. Geo-political risks driven by a trade war with China and Brexit negotiations were the main themes, with hints of the destruction due to the Coronavirus only appearing in January 2020. What started as a quiet rumble turned into a loud roar by the end of the first quarter as the spread of COVID-19 outside of China roiled markets. Fears of a global pandemic resulted in a material risk-off event as evidenced by the sell-off in risk assets and the massive rally in safe-haven yields. Equity markets faired particularly poorly after having just reached historical peaks (the Dow saw the biggest weekly point drop ever, falling over 3500 in the last week of March). Investment grade corporates, especially high yield corporates, also saw material repricing. Globally, markets reacted in a similar fashion as investors were left to consider the magnitude and duration of the virus’s economic damage due to quarantines, school closures, travel bans and other fallout. At the time, the scope and breadth of the impact on global supply chains was unknown, and, with many issuers releasing warning on earnings, investors decided it was time to shed risk.

The markets rebounded significantly in April on the backs of massive amounts of stimulus and support from global central banks. Encouraging developments relating to COVID-19, which included slowing rates of new infections and deaths, also contributed to the positive market sentiment, as did positive headlines surrounding clinical trials. All of this transpired in the face of negative economic news of historical significance, including GDP shrinking 4.8%, the first contraction since 2014 and the biggest drop since 2008; nearly 30 million unemployed since late March; and a route in the price of oil given a global supply glut. The divergence between domestic equities (S&P up 12.7% over the month) and other risk assets, along with a very uncertain economic future, left some investors wondering if the market was getting ahead of itself. Certainly, the Treasury market was not on the same page as equities, as evidenced by the persistently low yields across maturities.

Throughout the second and third quarters the market continued to rebound with modest but steady improvement in economic data, reassurance from global central banks and improvement in case counts globally. Then, late in the third quarter, risks began to rise again due to the November US Presidential election and the threat of an unknown or prolonged outcome. By the end of October 2020, however, the positive risk-on tone returned as markets began to price in a high probability of a Biden victory. As compared to the beginning of the reporting period, spreads were actually 15 basis points (“bps”) wider at the end of the reporting period (as measured by the Bloomberg Barclays Corporate Bond Index), and excess returns to Treasuries (-87 bps) were negative. Despite this, the strategy was able to beat the benchmark materially as described below.

The Fund outperformed the Index for the twelve-month period ending October 31, 2020 by 243 bps, before taxes and fees. Sector selection was the main factor impacting performance given the dramatic tightening of spreads witnessed in the last six months of the period. Issue selection was also positive, although to a lesser degree. The Fund’s underweight to Treasuries had the largest impact, with additional material contributions from the overweight to corporates, both industrials and financials, and the out of benchmark allocation to Commercial Mortgage-Backed Securities (“CMBS”). The allocation to cash was the only negative impact to sector selection although the underweight to agencies was positive in roughly the same amount. Notably, much of the Fund’s outperformance occurred during the first and second quarters of 2020 as the Fund reduced risk prior to the onset of COVID-19, and subsequently was able to take advantage of favorable valuations in corporate bonds when the market sold off at the end of March. Issue selection was also a material positive contributor, driven primarily by specific industrials, and financials also made a positive contribution. Within corporates, technology, consumer non-cyclicals and insurance were the primary sources of issue selection, which more than offset the detraction from taxable municipals. Yield curve and duration at the top line were essentially neutral, as the negative curve impacts offset the positive duration impacts. We believe this is more the result of the sector allocations (i.e. underweight to Treasuries) than an expressed view on the direction of interest rates.

Looking forward, we believe there are several uncertainties that may lead to further volatility, including the timing and magnitude of additional fiscal stimulus, COVID-19 vaccine distribution, and the possibility for further COVID-19 case surges as the weather cools across most of the US. While short-term uncertainties remain high, we believe the recovery will continue and significant fiscal stimulus will materialize in 2021. Our view is that this, combined with a continued recovery in labor markets, ongoing support from the US Federal Reserve (the “Fed”), and the tailwinds from a weaker dollar and oil, will create a favorable dynamic for both growth and risk assets.

So where does that leave our asset allocation? We entered this year with the most defensive asset allocation we have seen in a number of years across the desk. Fast forward to March, and spreads in most fixed income sectors moved to the cheapest levels in decades, barring a couple of months during the financial crisis. We added a significant amount of risk over the last couple of quarters, particularly in credit markets, taking advantage of some of the most attractive valuations we have seen in years. This meant reducing positions in more defensive securitized sectors and Treasuries and increasing exposures to Investment Grade credit, High Yield corporates, taxable municipals and to a lesser extent Emerging Markets. This has worked well, as riskier fixed income sectors, following significant losses in the first quarter, have recovered over 80% of their losses through the support of substantial intervention from the Fed.

Despite the significant recovery in valuations across credit markets, the Fund’s portfolio has a risk posture significantly higher than 12 months ago. We believe that a gradual economic recovery, an accommodative Fed and close to zero yields on cash and short Treasuries means the support for yield should remain robust. The Fund’s largest overweight remains in Investment Grade credit, which we believe benefits the most from central bank support. In the absence of a dramatic change in current valuations or significant deterioration in the economic backdrop, we expect this to persist.

In addition to an increased corporate credit exposure for the Fund, we have begun to see value in the taxable municipal market, which we believe has lagged the sharp rally in corporate valuations, particularly in revenue bonds where valuations appear attractive to us relative to fundamentals. Finally, within the securitized space, we have recently started to rebuild exposures to Agency Mortgage-Backed Securities (“MBS”), which we had sold earlier in the year, and to maintain a structural exposure to AAA-rated Collateralized Loan Obligations (“CLOs”), which we believe offer an attractive combination of yield and security.

With respect to rates, the current official policy is that rates will remain at zero through 2022. With ongoing aggressive intervention from the Fed and a concerted campaign of financial repression, we believe rates will remain low and in a fairly defined range for the foreseeable future. While the volume of issuance the Treasury has to undertake may create a slight steepening bias to curves, we believe any material move steeper would likely induce further intervention from authorities.

Despite the recovery in spreads over the last two quarters, we believe that significant opportunity remains across US fixed income. Valuations in credit and certain securitized sectors still remain more attractive than they have for a number of quarters. We believe volatility will remain high but that an absence of yield globally and aggressive central bank and fiscal support will ultimately be beneficial to fixed income valuations.