SCHRODERS (SDR) SHARES: 2025 PERFORMANCE, KEY DRIVERS AND 2026 OUTLOOK

How did Schroders perform in 2025?

Schroders plc (LSE: SDR), one of the UK's most prominent asset management firms, experienced a dynamic year in 2025. Despite facing macroeconomic headwinds and market volatility, the company demonstrated resilience and delivered moderate shareholder returns, underpinned by strong institutional flows and innovative investment solutions.

At the start of 2025, Schroders’ share price was trading at approximately 390p. Throughout the year, the stock exhibited periods of modest growth interspersed with short-term corrections, largely mirroring the broader trends across the FTSE 100 and global equities. By December 2025, SDR was trading around 425p, representing an approximate year-to-date return of 9%—a modest but healthy gain in the context of macroeconomic uncertainty and fluctuating investor sentiment.

Schroders’ operational performance played a crucial role in supporting this share price appreciation. Interim results published in July 2025 revealed a 5% increase in assets under management (AUM), rising to £838 billion from £798 billion at the end of 2024. This growth was driven by:

• Robust inflows in Schroders Capital and Wealth Management units
• Continuous expansion into ESG and thematic investment strategies
• Strong demand from institutional clients in Asia and continental Europe

Additionally, Schroders declared a maintained interim dividend of 6.5 pence per share, reassuring investors with its continued commitment to capital return policies amidst an inflation-sensitive economy.

Sector rotation trends in the UK financials space during the middle of the year benefited active managers like Schroders. The global equity rally between August and October 2025, largely fuelled by stabilising interest rates and improved growth outlooks in key markets such as the US and China, provided a further tailwind for the company’s funds.

That said, Schroders was not immune to broader industry challenges. Heightened regulatory scrutiny around non-transparent ESG funds posed reputational risks, although Schroders tackled this proactively by amending disclosure frameworks and enhancing their ESG labelling. Another concern was fee pressure across its retail fund offerings, especially in the UK and Europe, where competition has intensified amid passive fund alternatives outperforming short-term expectations in volatile periods.

Nonetheless, analysts highlighted Schroders’ solid fundamentals, diversified business model, and strategic agility as strengths that helped the company navigate the complex investment landscape of 2025. The company’s efforts to digitalise client experiences and integrate private markets capabilities also earned positive coverage in broker reports.

In summary, while not a standout performer on the FTSE 100 in 2025, Schroders delivered a steady performance that matched its reputation as a stable, long-term-focused asset manager. Given the company’s financial discipline, expanding international footprint, and commitment to innovation, SDR shares remained a favourable consideration for yield-focused and capital preservation-oriented investors alike.

What influenced SDR shares in 2025?

Several fundamental and external factors influenced the performance of Schroders’ shares throughout 2025. From global economic dynamics to internal strategic developments, the interplay of these drivers shaped both investor sentiment and the stock’s valuation profile.

1. Macroeconomic developments

The monetary policy trajectory of the Bank of England played a central role. As inflation rates in the UK declined to below 3% by the end of Q2 2025, expectations for interest rate cuts grew stronger. In response, financial markets exhibited higher risk appetite, benefitting asset managers through greater fund inflows and rising asset valuations. Conversely, early-year concerns over stagflation and tight policy settings weighed on UK-focused funds and reflected briefly in Q1 share price stagnation for SDR.

2. Institutional flows and asset growth

Schroders reported consistent net inflows from institutional clients in Asia, the Middle East and Europe. The appeal of Schroders Capital—its private markets arm—helped offset weaker flows from UK retail investors. New mandates in infrastructure debt and real estate further strengthened the firm’s product mix. AUM figures consistently outperformed market expectations, improving quarterly investor confidence.

3. Strategic partnerships and innovation

During the second half of 2025, Schroders expanded its reach via joint ventures and regional tie-ups, most notably:

• Expanding its stake in Benchmark Capital to enhance UK wealth advisory capacity
• Launching digital platforms with third-party fintech firms for tailored solutions
• Reinforcing its engagement with clean-tech and energy transition funds aligned with updated ESG guidelines

Shareholders generally responded positively to these moves, viewing them as investments in future growth streams that reinforce Schroders’ adaptability.

4. Regulatory and reputational considerations

The FCA’s increased oversight on ESG mislabelling in early 2025 saw multiple asset managers come under scrutiny. Schroders adjusted proactively, becoming one of the few large firms to attain Level 2 compliance under the FCA’s Sustainable Finance Disclosure Regulation (SFDR) adaptation framework. While short-term expenses linked to regulatory changes rose, the company bolstered its credibility with institutional stakeholders.

5. Dividend policy and shareholder appeal

Dividend continuity proved to be a stabilising factor for Schroders shares. In a year where dividend volatility plagued several FTSE financial stocks, Schroders maintained its interim dividend and is anticipated to declare a final dividend in March 2026 at a level comparable to FY 2024. This continued shareholder return was instrumental in retaining income-focused investors, particularly amid bond yield fluctuation.

6. Technological transformation

Investments in artificial intelligence for portfolio construction, digital fund distribution and robo-advisory services further streamlined operations and improved investor onboarding. The market interpreted these moves as long-term efficiency drivers, potentially reducing operating margins in the medium term.

Collectively, these drivers reinforced investor trust in Schroders’ capacity to weather sectoral pressures while positioning for sustainable growth. Despite episodic volatility in 2025, these fundamentals underpinned SDR shares’ overall resilience.

What to watch in 2026?

As we look ahead to 2026, Schroders shareholders and prospective investors should monitor several themes and risk factors that could significantly impact the company’s share performance. These dynamics span local regulatory changes, global market shifts, and internal corporate developments.

1. Interest rate transitions

The speed and scale of Bank of England and European Central Bank rate adjustments will heavily influence Schroders’ UK and EU business revenues. A swift rate cut cycle could reinvigorate retail investor activity and enhance performance fee generation. However, persistently high interest rates may result in elevated cash allocations, tempering active fund inflows—particularly negative for open-ended equity and bond funds managed by Schroders.

2. Active vs passive dichotomy

The ongoing challenge from passive funds remains a structural threat to traditional active managers. In 2026, scrutiny will grow around Schroders’ ability to extract alpha and justify fees, especially in the retail segment. Product innovation in hybrid models and outcome-oriented multi-asset solutions may be key to preserving market share.

3. Growth of Schroders Capital

One pivotal factor for 2026 lies in the performance of Schroders Capital. The private markets division is expected to outpace group growth rates. Progress in real estate, private debt and energy transition funds will be watched for material AUM gains. The ability to scale successfully without deteriorating margins or increasing risk exposure is vital.

4. ESG evolution in investment frameworks

With sustainability legislation tightening across Europe and the UK, Schroders will need to demonstrate transparency and authenticity in its ESG-labelled offerings. Product exclusion criteria, carbon exposure metrics and green taxonomy alignment will be flashpoints. Reputational management and consistent ESG stewardship may impact client retention and acquisition.

5. Technological scaling and digital adviser role

2026 will be a year where technology initiatives transition from pilot to operational scale. Investors should closely observe the productivity and net client acquisition trends from Schroders’ robo-advisory and digital portfolio services. Integrating these into its core Wealth Management business could yield operational leverage or present friction if rollout lags behind peers.

6. Valuation and yield balancing

At a forward P/E ratio near 12.3x based on current consensus forecasts, Schroders trades at a mild premium to UK asset manager peers but is more justifiable if AUM growth persists. Maintaining competitive dividend yields (expected at 4.2%-4.4%) without compromising investment in innovation, marketing, and regulatory compliance will be closely examined by long-term investors.

7. Potential geopolitical uncertainty

Any escalation in geopolitical risks—from elections in the US and EU to supply chain disruption or fiscal downgrades in emerging markets—could impact risk assets and curb flows into active products. Schroders’ global diversification provides some insulation, but it remains vulnerable to global shifts in investment risk appetite.

In conclusion, Schroders enters 2026 with a strong franchise, a diversified global footprint, and growth momentum in key areas like alternatives and technology. However, sustained investor confidence will likely hinge on the management's agility in balancing innovation with regulatory and financial prudence in a rapidly evolving landscape.