FP WHEB Sustainability

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Environmentally friendly

In 2018 the fund, through its investments, recycled 49,000 tonnes of waste and treated 2.6 billion litres of waste water.

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Water management

One of the sub-themes of the fund is water management, with roughly 6.3% of the portfolio exposed to this.

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Specialist business

WHEB is a specialist fund management business, entirely focused on environmental and sustainable investing.

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Extensive experience

The team is one of the most experienced in the sector, with all members having a sustainable investing background.

The fund

WHEB is a specialist fund management business entirely focused on environmental and sustainable investing. Their single global equity strategy, first designed and implemented in 2004 and 2005, seeks to invest in companies providing solutions to sustainability challenges.

WHEB's listed equities team is one of the most experienced in the sector, with all members having significant experience in managing sustainability investment businesses and funds. The fund is led by Ted Franks, who joined WHEB in 2009 and has extensive experience covering renewable energy, water, waste and healthcare sectors. The investment philosophy that the managers employ is built around sustainability, growth, quality and valuation.

Water management

The team have identified four 'mega-trends' exerting a powerful influence over the development of the global economy:

  • Resource Scarcity
  • Ageing Population
  • Rising Population/Living Standards, and
  • Globalisation.

From this, nine investment themes are realised, one of which is the water management theme. The managers think the themes identified will persist for decades and will provide better growth opportunities than the market as a whole. That’s why at least one-third of a company's revenues must be coming from one or more of these themes to be considered for this fund.

Water Management as a theme makes up around 7% of the portfolio, which is a lot less compared to some of the more thematic funds in this area. Water is thought of as the natural resource with no substitute; increasingly under pressure as population growth, urbanisation and industrialisation in water-stressed regions adds to demand. The $450bn theme includes 13 sub sectors covering defensive utilities as well as new growth technologies in purification, desalination and irrigation.

Although the proportionate amount allocated to the theme within the portfolio can be viewed as small, the fund’s positive impact on the theme itself is not so small. During 2018 it was calculated that the strategy’s impact was equivalent to:

  • 2.6bn litres of waste water being treated,
  • 49,000 tonnes of waste being recovered or recycled, and
  • 3.5bn litres of water being cleaned and distributed for reuse.

Example holdings

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Holding
What they do
Xylem The leading global water technology company, operating in a $40bn market. They enable customers to transport, treat, test and efficiently use water in more than 150 companies.
Ecolab Inc The global leader in water, hygiene and energy technologies and services that protect people and vital resources around the world.
China Water Affairs Group Ltd A pioneer in the privatisation of water supply assets in China, they seek to create growth via volume/price increases.

Whilst this fund invests in companies relevant to the water theme, please be aware the managers also invest across several other responsible themes.