30-35

Average number of holdings

80-100%

Equity Exposure

ESG

Hard sector exclusions. Integrates Environmental, Social and Governance factors into the portfolio

What is the fund’s investment objective?

The fund seeks to generate superior risk-adjusted equity returns with a robust and disciplined investment process that focuses on investing in quality companies at attractive valuations and holding them for the long term, whilst integrating Environmental, Social and Governance (ESG) factors into the construction of the portfolio.

What is ESG?

It is easy to feel confused about ESG investing today. The media, and investment industry, are awash with differing interpretations of what is often being portrayed as a relatively new style of investing.

We see it differently. To us, ESG is merely a modern interpretation of an age-old concept that companies are not run purely for the benefit of their shareholders – there are other stakeholders to be considered.

Specifically, corporations are becoming increasingly aware of their Environmental responsibilities in terms of, for example, carbon emissions and waste management – future generations are the obvious stakeholders in this regard. Companies are also coming under increasing pressure to show Social awareness in their treatment of their own workforce and the wider community. Finally, good Governance aligns the interests of boards and management teams with shareholders and other stakeholders.

What ESG restrictions are in place?

The fund will not invest in the production of fossil fuels, alcohol, tobacco, gambling and armaments. In addition, quantitative and qualitative analysis is used to assess whether companies pay due attention and consideration to ESG concerns and demonstrate this through ESG policies and practice.

What is the investment opportunity?

While many asset owners remain focused purely on the generation of financial returns, the growth of ESG investing is undeniable and undeniably appropriate, in our opinion. Indeed, the world is warming up to the belief that we need to invest more responsibly, certainly in terms of how we treat the environment, but also with respect to how corporations behave from a social and governance perspective.

 

What ESG data is used?

For quantitative ESG analysis, we use Refinitiv as our third-party data provider. Refinitiv is a leading, global data provider, and offers one of the most comprehensive ESG databases in the industry, with over 150 content research analysts trained to collect ESG data covering over 7,000 public companies globally.

Sourcing from annual reports, company websites, NGO websites, stock exchange filings, CSR reports and news sources, a subset of the most comparable and relevant data fields is used to power the overall company assessment and scoring process.

A company’s ESG performance is measured across ten main themes, grouped under Environmental (resource use, emissions, innovation), Social (workforce, human rights, community, product responsibility) and Governance (management, shareholders, CSR strategy). There is significant overlap between these themes and the ten principles of the UN Global Compact, which cover Human Rights, Labour, the Environment, and Anti-Corruption.

If you would like more information, please contact us.

Risk warning:
The value of investments and the income therefrom is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. The value of overseas securities will be influenced by the rate of exchange which is used to convert these to sterling. The opinions expressed herein are those of Cantab Asset Management Ltd and should not be construed as investment advice. Past performance is not a guide to future performance.

ESG Performance Warning:
It is important to note that in selecting ESG investments, a screening out process has taken place which eliminates many investments potentially providing good financial returns. By reducing the universe of possible investments, the investment performance of ESG portfolios might be less than that potentially produced by selecting from the larger unscreened universe.