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Schroder International Selection Fund*European Equity Alpha

March 2003

For professional investors only

Zafar AhmadullahFund Manager

Webcast Presentation

*Schroder International Selection Fund will be referred to as Schroder ISF throughout this presentation

Schroder ISF European Equity Alpha

Fund Summary

– A new fund in the Schroder International Selection Fund range

– Emphasis on bottom-up stockpicking using Schroders’ extensive analytical resources and Fund Manager’s proven credentials

– Launched on 31 January 2003*

*The fund referred to in this presentation may not be registered for sale in your jurisdiction.Please contact your local Schroders office for more information


Philosophy

The Fund Manager will aim to invest over a longer time horizon using the best opportunities available

How?

– Bottom-up stockpicking approach using Schroders’ extensive research capabilities

– Value & ‘hidden growth’ bias

– Flexibility to adapt to different market conditions

– High tracking error - no benchmark constraints


Portfolio Characteristics

– Minimum 40 stocks, no maximum

– Up to 10% tracking error

– Stocks/Sector/Country - Max contribution to TE of 10% from an individual position

– Fully invested mandate (10% cash limit)

– Expect high short-term volatility v benchmark

– +5% p.a. outperformance target on a rolling 3 year basis (MSCI Europe index)

– Small/mid-cap bias (c. 50% of portfolio) in short to medium term


Source: Schroders as at 30 December 2002

Overview

Investment Process

A multi-disciplined and highly structured investment process that draws on our proprietary research, our state-of-the-art investment tools and the stock-picking expertise of one of our key Fund Managers

– Award-winning Fund Manager, Zafar Ahmadullah

– 27 Pan European Analysts and specialist small cap team

– Global Research Information Database (GRiD)

– Portfolio Risk Investment Strategy Manager (PRISM)

Large Cap Stock Research

Small and Mid Cap Stock Research

Risk Management Tools

Portfolio & Construction Monitoring


Investment Process

– Primarily fundamental analysis

– Significant emphasis on stockpicking capabilities of Fund Manager and analysts

Large Cap

– Focus on stocks rated 1 by our analysts rather than 1 and 2 - cherry picking the best prospects

– Significant divergence from Core Model Portfolio (which is index aware)

Small/Mid cap

– Small/mid cap bias means wide use of research and interaction with European Small Cap team

– Focus on value and ‘hidden growth’


What Will We Look for in a Stock?

– Industry anomalies: undervalued against peer group

– ‘Hidden growth’ not spotted by the market

– Potential corporate action

– Unfashionable companies with good business stories

– Turnaround/Recovery stories

– Companies trading at discounts to their realisable assets

– Unrecognised strong business franchises


Anglo Irish Bank

Stock Example

– Fast Growing Bank

– High quality management

– Initially not recognised by the market

– Comprises large position in Schroder ISF EURO Equity Fund

– Performed strongly*:

– 1 Year +56%, MSCI Europe -32%

– Since Purchase +70%, MSCI Europe -27%

0.1

0.3

0.5

0.7

0.9

Jan-99 Jan-00 Jan-01 Jan-02 Jan-03

Price to Index 40w Mov Ave

Anglo Irish Bank v MSCI Europe

Source: Thomson Financial, Datastream*Figures to 31 December 2002

x10E-2

Purchased for EURO Equity fund


Kingfisher v MSCI Europe

0.2

0.4

0.6

0.8

1.0

Jan 99 May 00 Sep 01 Jan 03


Source: Thomson Financial, Datastream

Kingfisher

Stock Example

– Europe’s largest DIY retailer

– DIY attractive industry with above average growth profile

– Castorama synergy benefits to come through

– Faster restructuring with sale of non core assets

– Kingfisher share price weakened by rights issue to purchase Castorama

x10E-2


Stock ExampleGBL

– Belgian holding company with stakes in Total Fina, Suez and Bertelsmann

– Current share price gives no value for the current stake in Bertelsmann

– Bertelsmann largest media company in Europe with €20 bn in sales

– GBL is able to list Bertelsmann from 2005 and therefore crystallise value for its shareholders

Source: Thomson Financial Datastream

GBL v MSCI Europe

2.0

3.0

4.0

5.0

6.0



x10E-2


Stock ExampleOTE

– Greek telco incumbent with exposure to Eastern European markets

– Limited 3G licence cost and potential for operational improvements

– One of the strongest balance sheets and a sustainable dividend yield of at least 6%

– Fallen out of emerging market index and has not yet appeared on European investors’ radar screens


OTE v MSCI Europe

1.0

1.5

2.0

2.5



x10E-2


Stock ExampleTesco

– Dominant UK position - 25% of market share

– Focused overseas expansion

– 11x 2003E earnings, EV/IC 1.3

– Innovative and highly regarded management


Tesco v MSCI Europe

1.5

2.5

3.5

4.5



x10E-2


6.6

-16.7

-25.3

-2.6

-18.3

-33.8

-50 -40 -30 -20 -10 0 10 20

2000

2001

2002

Fund Index

9.2%

1.6%

8.5%

-5 0 5 10 15

2000

2001

2002

Fund vs Index

Calendar Year Performance (EUR%)*

Zafar’s Track Record in EURO Equity

Zafar has managed the fund outright since April 2000

Source: Schroders, MSCI to 31December 2002* ‘C’ Class Shares

Please note that the above graphs relate to the Schroder ISF EURO Equity fundIt does not imply that Schroder ISF European Equity Alpha will enjoy similar performance or meet its objectives


Objective and Characteristics

Schroder ISF European Equity Alpha Fund

– Size: Euro 10 million

– Benchmark: MSCI Europe index

– Number of stocks: 70

– Tracking error: 5.0%

Performance Objective:

– 5% p.a. on a rolling 3 year achieved utilising a tracking error range of up to 10%

Fund Characteristics as at 28 February 2003:

Source: Schroders


0 10 20 30

Fund Weight MSCI Europe

Health CareMaterials

Consumer Staples

UtilitiesInformation Technology

Industrials

TelecommunicationsFinancials

Consumer Discretionary 9.2

2.9

2.5

1.0

0.1

-1.0

-3.7

-4.9

-5.4

-6.5

5.8

Weight Relative to Index

Energy

Fund PositioningSchroder ISF European Equity Alpha Fund - Sector Allocation

Cash


Zafar Ahmadullah

EURO Equity Fund

European Equity Alpha Fund

Performance ObjectiveBenchmark +3% p.a.on Rolling 3 years

Benchmark +5% p.a.on Rolling 3 years

Tracking Error 3 - 8% Up to 10%

Fees Standard Performance Related

Benchmark

Universe

Fund Manager

MSCI EMU

Eurozone

Zafar Ahmadullah

MSCI Europe

Pan Europe

EURO Equity v European Equity Alpha


Why Choose This Fund?

– The Fund Manager will pick the best investment opportunities in the market

– Not constrained by benchmark weightings

– Pan-European – larger investment universe

– Small/mid cap bias – an under-researched area which gives greater opportunity to add value

– Emphasis on long-term returns – rides through short-term market volatility





Fund Name

Appendix

ShareClass

A

B

C

BaseCurrency

Eur

Initial Charge

5.00% of the Offer price (5.26315% of the NAV/ps)

0.00%

3.00% of the Offer price (3.09278% of the NAV/ps)

Management Fee

1.50%

1.50%

1.00%

Distributor’s Fee

0.00%

0.60%

0.00%

Luxembourg Tax

0.05%

0.05%

0.05%

Performance Fees

15% of the outperformance of MSCI Europe*



Source: Schroders

Note: Administration fees include fees payable to the Fund Administrator and Custodian of the Fund, and to Schroder Investment Management (Luxembourg) SA for its services as Transfer Agent and Administration

* Provided the absolute performance is positive

Eur

Eur

Fee Structure


Important Information

This document 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 document 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.

The Company is not managed in order to qualify for UK distributor status. It may not meet the requirements of investors subject to UK taxation.

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

Past performance is not necessarily a guide to future performance and may not be repeated. Investors may not get back the full amount invested, as prices of shares and the income from them may fall as well as rise.

Exchange rate changes may cause the value of any overseas investments to rise or fall.Schroders has expressed its own views and opinions in this document and these may change. Unless otherwise noted all figures are sourced from Schroders as at 31 December 2002

This presentation is issued by Schroder Investment Management (Luxembourg) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg. For your security, all telephone calls are recorded.

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