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UK Sustainable Equity Fund

Investing in companies making a positive contribution to the future of society and the environment.

Investec UK Sustainable Equity Fund

The Investec UK Sustainable Equity Fund is a differentiated investment strategy which aims to provide long-term capital growth and income by investing in companies making a positive contribution to the future of society and the environment.

Matt Evans

Matt Evans

Portfolio Manager

Reasons to invest


1 Differentiated approach that focuses on positive impact and engagement
2 Innovative and transparent monitoring and reporting to demonstrate companies’ and the portfolio’s impact on society and the environment
3 Experienced Citywire AA-rated fund manager, with successful track record managing an award winning ethical strategy
4 Leverages the resource and established processes of Investec Asset Management's (IAM's) Quality and ESG teams
5 Fully aligned with IAM’s purpose, integration of ESG, and development of the ‘Investec Asset Management Sustainable Themes’

Fund facts

Sector: IA UK All Companies
Launch Date: 14 December 2018
Index: FTSE All-Share

Quick links

Ratings

  • Investment philosophy

    Our approach to sustainable investing

    We believe that a fundamental transformation is needed to a position where the environment, society and business operate in an interconnected way rather than separately. We have a role in that transformation.

    By understanding the three pillars of sustainability and how a company operates within this framework, we believe that we can create a portfolio that will deliver sustainable investment returns and positively contribute to a better future for society and the environment.

    Source: Investec Asset Management

  • IAM Sustainable Themes

    An approach to measuring impact

    At Investec Asset Management, we have developed a proprietary framework of investible ‘Sustainable Themes’ focused on transformation towards a sustainable future. Mapped against the UN Sustainable Development Goals (SDGs) that cover social and economic development issues, including poverty, hunger, health, education, global warming and social justice.

    It provides a consistent approach to identification, assessment, monitoring and reporting of our companies’ and the portfolio’s impact on society and the environment.

     

    IAM Sustainable Themes

    Source: Investec Asset Management

  • Investment process

    A rigorous and repeatable four stage investment process

    Idea Generation

    Exclusions and screenings

    • Experience
    • Internal/external research
    • Company engagement

    Companies: 2,000-250

    Exclusions & screening

    We exclude certain areas of the market that are not consistent with our sustainable investment approach. Examples of these may include: gambling; tobacco; controversial weapons; adult entertainment; and heavy extractive industries. In aggregate, approximately 30% of the FTSE All Share index.

    Company engagement

    In addition to internal and external research, company meetings are key and give us valuable insight into the operational sustainability of a business and provide the opportunity to engage on capital allocation and ESG issues.


    Fundamental analysis

    Impact assessment

    • Quality framework
    • Valuation discipline
    • Long-term focus

    Companies: ~100

    Fundamental analysis

    Using IAM’s tried and tested Quality research process that analyses a Company’s Business Model, Financial Model and Capital Allocation decisions. Valuation analysis is at the heart of this process.

    A process successfully employed in the highly regarded Investec UK Alpha Fund and across the team’s regional and global funds.

    Impact assessment

    An additional key focus for the Investec UK Sustainable Equity Fund and Input into the Quality research process.

    Proprietary analysis of a company’s impact on society and the environment, both internally via its operations and use of resources, and externally via its goods and services.

    Working with the ESG team, using key metrics and the Sustainable Themes framework; we use a combination of internal research and external ESG scores to fully assess and document a company’s internal and external impact.


    Portfolio construction

    Positive impact

    • Risk/reward conviction
    • Benchmark agnostic
    • Diversification

    Companies: 40-60*

    Portfolio construction

    Portfolio construction and position sizing are driven by an assessment of risk, reward and a company's sustainability. A greater allocation will be given to those businesses making the most positive impact but diversification is key to ensure the portfolio is never overly exposed to one theme or growth driver.

    * These internal parameters are subject to change not necessarily with prior notification.


    Monitoring and reporting

    Engagement

    • Daily monitoring
    • Innovative reporting
    • Transparency

    Companies: 40-60*

    Monitoring and reporting

    Clear, transparent and consistent: We believe transparency and openness is key for sustainable investment funds, enabling clients to clearly measure the impact of their investments.

    Key to this will be an Annual Impact Report where we will aim to demonstrate the portfolio’s external and internal impact, areas of company engagement and how this engagement is contributing to positive improvement.

    Monitoring the Fund’s impact by measuring revenue and R&D spend directly linked towards a specific IAM Sustainable Theme. Working with IAM’s ESG team we are continuing to develop key metrics.

    We also utilise an external independent portfolio assessment tool from 3D Investing.

    * These internal parameters are subject to change not necessarily with prior notification.

  • Fund suitability

    Fund Suitability

    The Investec UK Sustainable Equity Fund is a core holding for clients in UK sustainable equities, diversified by style, theme and market cap.

    It may be suitable for investors:

    • Keen to invest in companies making a positive, sustainable impact on society and the environment
    • Seeking a core UK sustainable equity fund managed by a proven investment team
    • Already invested in a UK equity fund but looking to supplement this with a UK sustainable investing allocation.

Important information

General Risks:
The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth. Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made.

Specific Risks:
Geographic / Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that the resulting value may decrease whilst portfolios more broadly invested might grow. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company.