Liontrust GF SF US Growth Fund Launch Sales Aid - Flipbook - Page 3
Reasons to invest in the Fund
Why the US, exposure and sustainability
Investment team
Innovation: The US has some of the world’s most innovative companies.
Experienced team: Chris Foster and Simon Clements are part of the
17-strong Liontrust Sustainable Investment team. The team comprises
experienced investors and younger talent who have joined more
recently and manages a total of £11.2 billion in AuMA.
Growth potential: Sustainability in the US is around 10 years
behind where it is in Europe and the UK. therefore, the
potential growth in assets in this area over the long
term is very strong.
ESG issues: There is also the potential
opportunity in the US of the adoption of the
disclosure of ESG issues. We are looking to
partner with US companies to improve this.
Pioneers: Key members of the team were among the pioneers of
sustainable investing, being founder members of the PRI (Principles
for Responsible Investment) while at Aviva and leading on issues
that are now central to mainstream investing such as not owning
companies exposed to diesel engines, coal and oil (in 2001) and
moving to exclude natural gas (from 2016).
Mid cap bias: Most of the portfolio will be invested
in companies with market caps of $50 billion and below,
which are mid cap stocks. Some of these mid cap stocks
are under-followed by both analysts and fund managers.
Advisory committee: The managers consult an external Advisory
Committee, which comprises five experts in sustainability. The
Committee’s role is to continually assess and challenge the team
and offer guidance on evolving issues within sustainability.
Portfolio characteristics: The SF investment process leads
to SF portfolios that comprise stocks in aggregate with higher
growth rates, higher margins and lower levels of net debt than the
average of their benchmark indices. The team spends a lot of time
seeking to identify those companies that will generate higher returns
on capital in the future.
Differentiated returns: The top 50 stocks in the MSCI US Index
make up over half the index in weights. We will hold only six of the
50 at launch with means the Fund will have differentiated returns
from the index.
Opportunity: The volatility and re-rating of quality growth stocks
present a potentially attractive entry point to the US for long-term
sustainable investors. The underlying valuation in the companies
overlooked are looking attractive over a five-year view.
SFDR: The Fund will be Article 9 as sustainability is fully integrated
into the investment process.
Performance
Performance: Over five years to 31 March 2023, the Liontrust SF
Global Growth Fund returned 70.1% against 66.77% by the MSCI
World Index and 51.88% by the UK’s Investment Association (IA)
peer group of global funds.
US performance: The US portion of the Liontrust SF Global Growth
Fund returned 112.3% over this period compared to 87.1% by
the MSCI USA Net GBP index.
US drivers: The US allocation has driven 85% of the total return
despite representing 59% of the SF Global Growth Fund on
average.
Investment process
Distinct, rigorous and repeatable process: The process seeks to
generate strong returns from investing in companies aiming to
deliver profits through positive social and environmental impacts.
The managers 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 then 21
themes within these.
Selecting stocks: The managers identify well-run companies whose
products and operations benefit from these transformative changes
and which are helping to make the world cleaner, healthier and
safer. Further analysis hones this list down to those companies that
exhibit superior sustainability management, will deliver persistently
high returns on equity and are attractively valued on a five-year
view.
Integrating ESG (environmental, social and governance): Each
manager is an analyst and is responsible for conducting research
on a given sustainability theme and the sustainability analysis of
potential investments. As each manager is also responsible for the
business fundamentals and valuation analysis, we believe it derives
an information advantage that would be lost if these roles were
separate.
Time arbitrage: By having a longer time horizon than most, the
managers can patiently invest in businesses they believe have years
of growth ahead, and take advantage of dislocations in the market
when these businesses are trading considerably below what the
managers believe they are worth.
Engagement: This is an integral part of how the managers invest.
Engaging on key ESG issues gives the managers greater insight,
helps to identify leading companies and is used as a lever to
encourage better business practices.
Liontrust GF Sustainable Future US Growth Fund - 3