Listed Equity

Strategy

1. Investment Philosophy and Process

Our universe is focused on companies which provide solutions to sustainability challenges.  As a result the universe has superior structural growth characteristics.

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We have developed a structured and disciplined investment process. This process  draws on our deep understanding of the global challenges facing society and aims to produce a diversified portfolio of stocks designed to out-perform the market over time.

We aim to isolate the best long-term investment opportunities from our universe. Stocks are selected after in-depth research by a team that integrates financial and strategic assessment with environmental, social and governance analysis.

Our thematic focus gives us a growth style bias in the fund. We prefer to invest in high quality established businesses with strong growth, driven by our themes. Valuation is an integral part of our stock selection process.

2. Themes

Major global challenges including a growing and ageing population, increasing resource scarcity, urbanisation and globalisation, are reshaping the economic landscape. But these challenges are also generating real market opportunities for companies providing solutions.

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Our four social and five environmental themes comprise those companies that are providing solutions to the most serious challenges we face. These themes form the basis of our investment universe.Our universe has the following characteristics which we believe are attractive:

  • Large – circa. 1000 stocks: developed over more than eight years of research
  • Diversified: exposed to a wide range of sources of growth
  • Global: we pick stocks from all across the global equity market
  • Mid-cap: over 90% of the fund is >$1bn market cap, we tend to avoid the higher risk in very small companies and unproven technologies
  • Structural growth characteristics:  our internal research suggests that our universe is growing faster on average than the wider global equities market, and we expect this relative outperformance to intensify in the future

3. Stock Selection

We are stock pickers with a structured investment process and a different approach to fundamental research.

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Having defined our investment universe, we build a portfolio of between 60 and 80 holdings.

We believe that active management through deep fundamental research delivers the most attractive investment returns.  We view every investment from a variety of different perspectives and viewpoints. This helps us to challenge consensus thinking and sets us apart from our peers.

We integrate environmental, social and governance analysis within our traditional financial analysis. This creates a better basis on which to value investment opportunities.  It also enables us to get a superior view on the quality of management, and the resilience and risk associated with the outlook.

We aim to identify high quality, long-term growth situations, but the exercise of valuation discipline is critical to the investment decision.

Our investment process sits within a longer term framework. Our average holding period is consistently over three years and often much longer.  Our approach runs counter to the increasing propensity of the market to ‘trade’. This enables us to extract value from our fundamental research.