The latest fund tip, hand-picked by our Investment Guidance team
Fund of the Month September
September sees the 5th anniversary of the United Nation’s Sustainable Development goals (SDGs). These global goals are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030. The SDGs call on companies everywhere to advance sustainable development through the investment they make, the solutions they develop and the business practices they adopt.
Our Fund of the Month for September is Janus Henderson Global Sustainable Equity a fund whose strategy is aligned to the SDGs. (accumulation)
Reasons to buy
- The fund contributes to all 17 Sustainable Development Goals.
- Established strategy built on a 29 year history of sustainable investing with environmental and social considerations embedded in the investment process.
- The team produce a Quarterly Impact report and an Annual sustainability report so customers can see the benefit of their investment.
- Long term consistency with 1st quartile performance over 1,3,5 and 10 year periods.
Things to be wary of
- Exposure to smaller-caps (June ’20 c.6%) can enhance volatility in the fund.
- The fund is predominantly growth orientated so many not be suitable for an investor seeking income.
- Investors should be aware that using ethical criteria can reduce the size of the investment pool of which the fund can select from.
About the fund
The fund seeks to invest in companies that have a positive impact on the environment and society with manager Hamish Chamberlayne stating, ‘The guiding principle of our investment philosophy evolves around: Is the world a better place because of this company?’
This established strategy is built on a 29year history of sustainable investing with environmental and social considerations embedded in the investment process. The highly experienced team are supported by a large global network including an Ethical oversight committee and Governance and Responsible Investing team.
The managers believe there is a strong link between sustainable development, innovation and long-term compounding growth whilst the approach also mitigates downside risk.
When analysing potential investments, the team consider how companies generate profits and their impact on people and the planet. The team also avoid investing in companies with goods or services that contribute to environmental or societal harm believing those on the wrong side of environmental and social trends to be subject to both disruption and operational risk.
The UN SDGs are used as an impact measurement of the strategy and a helpful measure for ensuring sustainability. The managers believe that company engagement and active portfolio management are essential features of any true sustainable investment strategy. They are committed to provide clients with the highest standards of engagement, transparency and measurement, producing a Quarterly Impact report and an Annual sustainability report.
The fund is explicitly low carbon with a footprint around 85% lower than the MSCI World Index
Portfolio positioning and performance
The managers aim to hold between 50-70 global equities within their portfolio and have identified four environmental and social megatrends which they believe are pressuring the global economy. These are:
- Population growth
- Ageing population
- Resource constraints
- Climate change
Underpinning these are 10 environmental and social themes supporting the UN Sustainable Development Goals (SDGs). These are:
- Environmental – Clean Energy, Efficiency, Environmental services, Sustainable Transport and Water Management.
- Social – Knowledge & Technology, Health, Safety, Sustainable property & finance and Quality of life.
As at June 2020 the fund held 42% in Information Technology, an overweight of 20% compared to the MSCI World Index and the theme of ‘Knowledge and Technology’ accounted for 7 of the top 10 holdings.
Investors should be aware that volatility in the fund may be enhanced due to its exposure to small-caps (c.6% June 2020) however it has provided strong long-term consistency with 1st quartile performance over 1,3,5 and 10 year periods.
As the fund is predominantly growth orientated it may not be appropriate for an investor seeking income.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.