Liontrust’s Sustainable Investment team is celebrating its 20th anniversary earlier this year with the launch of the SFDR Article 9 rated GF Sustainable Future Multi-Asset Global Fund.
This fund is approved for distribution across Europe and focuses on companies helping to make the world cleaner, healthier and safer while seeking to generate attractive returns for investors.
GF Sustainable Future Multi-Asset Global
- The Fund primarily invests in global equities, infrastructure equities and corporate bonds, while also being able to hold government bonds and cash, tactically adjusting exposures depending on opportunities.
- The 13-strong Sustainable Investment team is headed up by Peter Michaelis, who has a 20-year track record running Sustainable Multi-Asset strategies.
- GF Sustainable Future Multi-Asset Global has a similar profile to the Liontrust SF Cautious Managed strategy, with 40 percent to 60 percent in equities, 20 percent to 50 percent in bonds and up to 20 percent in cash.
- To the end of September 2021, the Sustainable Future Cautious Managed Multi-Asset strategy has outperformed its benchmark over three and five years, and since launch in July 2014.*
- Since 2015, the team has shown how themes and companies contribute to the UN’s Sustainable Development Goals (SDGs), as well as the impact of their investments. On average, the SF funds emit 68 percent less carbon dioxide than the markets in which they invest.
Over the 20 years we have been running the Sustainable Future strategies, the key lesson proved is that integrating sustainability into stock selection can enhance returns. At launch in 2001, our goal was to deliver performance by investing in sustainable companies and also engaging with businesses to encourage best practices on environmental, social and governance issues.
The Key to Performance
At the time, these were radical notions: most investors felt incorporating impact into investment was a distraction at best and, at worst, guaranteed to deliver worse returns. Today, the picture is very different with almost all companies reporting on corporate social responsibility or ESG.
Ultimately, the key to our performance is investing in companies contributing towards that cleaner, healthier and safer future. We have provided capital to businesses decarbonizing electricity generation, for example, developing innovative vaccines, building the global communication infrastructure, and making roads safer.
This highlights the importance of identifying structural growth and we continue to believe investors underestimate the speed, scale and persistency of such trends.
Three Important Mega Trends
We look at the world through the prism of three megatrends, Better resource efficiency (cleaner), Improved health (healthier) and Greater safety and resilience (safer), and 21 themes within these. Change can happen very rapidly as new technology comes along and these shifts often look obvious after the fact.
We highlight the example of transport in New York: back in 1901, there were thousands of horses pounding the streets and a photo shows a single anomaly in the shape of an early car.
Just a decade later, however, this cheaper, cleaner and quicker transport solution had taken over and there was barely a horse to be seen – and we expect similar transitions from internal combustion engine vehicles to electric, and gas boilers to electric heat pumps.
The Answer Comes Through Processes And Funds
As long-term sustainable investors, we have faced questions on whether ESG would survive the next downturn and Covid-19 has brought renewed scrutiny. Rather than debating sustainability itself, we address this via our process and funds.
We begin with those themes, focused on the shift towards a more sustainable economy, and also require strong fundamentals and excellence in ESG; our holdings tend to have processes in place to manage customer relationships, employees and supply chains.
As we look past Covid-19, the tools and techniques developed to outperform in the face of a climate emergency, obesity epidemic or failing boards will be the making of sustainable investment.
*Performance of Individual Years (in %), as of the last quarter-end:
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Key Risks: Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested. The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term. Some of the Funds managed by the Sustainable Future team involve foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. Investment in Funds managed by the Sustainable Future team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The value of fixed income securities will fall if the issuer is unable to repay its debt or has its credit rating reduced. Generally, the higher the perceived credit risk of the issuer, the higher the rate of interest.
Disclaimer: This information should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust. Always research your own investments and if you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. Wednesday, October 27, 2021, 1:24 PM
