Explaining and Exploring Sustainable Investment - Flipbook - Page 10
Wouldn’t expect to find… What sort
of companies are held in a Liontrust
Sustainable fund?
Looking at the companies held across the Liontrust Sustainable Future
funds highlights the huge range of sectors and trends these vehicles
can access; we have come a long way from just avoiding tobacco
and weapons manufacturers.
Every position in the Sustainable Future funds has to satisfy four
criteria. We begin with sustainable themes, focusing on the shift
towards a cleaner, healthier and safer economy. To do this, we look
at the world through the prism of three mega trends, Better resource
efficiency (cleaner), Improved health (healthier) and Greater safety
and resilience (safer), and 20 themes within these.
We also require excellence in ESG; our holdings tend to have
processes in place to manage customer relationships, employees
and supply chains. As we look past Covid-19, the tools and
techniques developed to outperform in the face of a climate
emergency, obesity epidemic or failing boards will be the making
of sustainable investment. For each business, we determine key
ESG factors that are important indicators of future success and
assess how well these are managed, with every company having
to meet a minimum threshold.
All our holdings will also have robust business fundamentals and,
finally, we want to buy the shares at attractive valuations.
Increasing financial resilience
A resilient financial services sector is necessary for economic wellbeing through utility-like provision of banking, lending and effective
ways of appropriately saving for the future, as well as mitigating
risks through insurance. PayPal is a US-based company that makes
transacting online easier and safer for consumers and businesses.
Identity theft and fraudulent transactions are significantly lower on
PayPal than its competitors, and the value we see from this business
should come from a long runway of growth, amplified by the
excellent position the company has created for itself.
10 - Liontrust: Explaining and exploring sustainable investment
Insuring a sustainable economy
We believe insurance can spread the risk faced by an individual
or corporation and makes a beneficial contribution to society.
Prudential is predominantly a life and health insurer, listed in the UK
and focusing on growth in Asian markets. It is bringing insurance
to those who have not had access to it before and those unlikely to
be supported by the state.
Saving for the future
We see a growing need for people to be able to access good
advice and choose appropriate investments to ensure they have
saved enough for retirement. Failing to invest for the future and
relying on state-funded pension schemes will result in a significant
drop in quality of life as government finances come under
increasing pressure. Avanza is a Swedish savings platform in an
underpenetrated market, providing clear benefits to society by
helping individuals manage their savings in a cost-effective manner.
