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Why we recommend it
Peter Michaelis and Martyn Jones are the named co-managers on this strategy. Jones took over from previous co-manager Neil Brown, who left the firm in November 2020 and had run the strategy since April 2011. Jones joined Liontrust as an analyst in 2012 before being promoted to co-manager alongside Brown in November 2019. Brown manages the portfolio on a day-to-day basis with the oversight of Michaelis, which provides additional comfort as he boasts more than two decades of experience in sustainable investing. He also heads Liontrust’s 17-strong sustainable investment team, which is split into a group managing equity strategies and another focusing on fixed-income products.
Michaelis first developed and implemented the approach in 2001 while at Aviva Investors and has applied it consistently and successfully since then. The investment approach is anchored around the team’s thematic framework and its belief that sustainably managed businesses will show better and more resilient growth prospects over time. The thematic framework guides idea generation and has three main sustainable trends (better resource efficiency, improved health, and greater safety and resilience), divided into 20 sub-themes. The focus is on identifying high-quality firms exposed to and benefiting from one of these areas of growth and where the team can build reliable long-term forecasts. Typically, these businesses will exhibit high return on equity, defendable margins, and an ability to maintain their competitive advantages. Additionally, the approach requires companies to offer core products or services that are making a positive contribution to society or the environment. The valuation approach is flexible and the team’s longer-term thinking results in a low portfolio turnover, with holding periods typically exceeding five years.
The resultant portfolio is concentrated and tends to have a mid- and small-cap bias and sector bets which deviate significantly from the MSCI Europe ex UK Index. The fund typically also has growth style bias and these factors all contribute to a return profile that can deviate significantly from the index from time-to-time.
The fund’s mid- and small- cap bias results in a higher risk, more volatile return profile.
The fund is reasonably priced: The ‘2’ accumulation share class levies annual ongoing charges of 0.87%.
ii ACE ethical style: Considers. This means the fund carefully considers an often wide range of ethical and/ or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.
Fund EcoMarket category: Sustainability Themed. This relates to funds that focus on sustainability related issues and opportunities as part of their investment strategy, often alongside ethical criteria. Their focus is often around longer term societal and environmental trends.
How the fund is managed: The fund’s prospectus states that it meets social and environmental standards and is suitable for investors who aim for growth from their investment. All investments, principally within and across European equity markets, will be expected to conform to Liontrust’s social and environmental criteria.
Ethical screening: In certain market conditions the performance of the fund may differ significantly from others in the peer group that do not exclude specific sectors or companies from a comparable investment universe.
Currency: Your investment may be significantly affected by changes in currency exchange rates.
Portfolio concentration: The fund has a concentrated portfolio compared with the MSCI Europe ex-UK index. The fund typically holds around 40 stocks.
|Information and data compiled to March 2023.|
The information we provide in the ACE 40 investments list does not constitute a "personal recommendation". You should ensure that any investment decisions you make are suitable for your personal circumstances and that the ethical style of the investment reflects your personal beliefs.
Past performance of the underlying constituents is not a guarantee of future performance. Remember, the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.
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