We’re pleased to let you know that this Quilter Investors fund listed on the Big Exchange has gone through its annual reassessment and it retains a silver medal.
We’re pleased to let you know that this Quilter Investors fund listed on the Big Exchange has gone through its annual reassessment and it retains a silver medal.
In addition to its ethical policy, which excludes a number of harmful industries and “unethical” areas of the market from being allowed into the fund, the team also seek to invest in solutions to the global environmental and economic challenges of urbanisation, resource scarcity and climate change.
Furthermore, a strong thematic approach is adopted. What we mean by that is that the team are focused on clear areas (or themes) where they aim to deliver a high level of positive impact: climate change, population growth and resource scarcity. You can learn more about the fund and its investment approach below.
Quilter Investors is part of Quilter PLC, a leading provider of investments and wealth management in the UK and internationally. The parent firm is listed on the London and Johannesburg stock exchanges.
The firm has a stated mission is to create prosperity for the generations of today and tomorrow and, in order to contribute to a more sustainable future, they are committed to behaving and investing responsibly. Quilter are also signatories to the United Nations backed Principles for Responsible Investment (PRI) which is a common way for Asset Managers to publicly demonstrate their commitment to investing responsibly.
Quilter considers the wider impact of its investments, in addition to pursuing desired investment outcomes. The Quilter Foundation charity supports thousands of young people, who are facing significant challenges, to improve their wellbeing, education, and employment prospects.
During 2020 Quilter Investors formalised their Responsible Investment approach across the business and is committed to building a team dedicated to supporting managers at all stages of the investment process.
So far so good, and we can see that Quilter is doing a lot and making a good impression in the market. Now we take a look a bit closer at the investment itself to see if everything stacks up.
The Fund seeks to deliver income and capital growth by investing predominantly in companies that demonstrate sound ethical practices. It aims to outperform the FTSE World Index, net of charges, over rolling five-year periods.
The managers exclude companies which fail to meet certain ethical standards by applying a negative screen to avoid activities such as gambling, alcohol tobacco, animal testing and armaments. They then apply a positive screen to focus the portfolio on companies that promote efficiency in areas such as energy, water, resources, and food.
The fund has a bias towards large well-established companies with good growth prospects and 61% of the portfolio is invested in the US. Japanese companies make up 11% of the fund whilst the UK accounts for 7%. The fund invests in a wide range of sectors with the largest exposure being to Industrials (42% of the fund), Information Technology (21%), and Consumer Discretionary (7%). *
The Sustainable Development Goals with which the Fund has the greatest alignment are SDG 6 (Clean Water & Sanitation), SDG 9 (Industry, Innovation & Infrastructure) and SDG 12 (Responsible Consumption & Production). These account for 16%, 15% and 12% of the portfolio respectively. **
Although labelled an ethical fund, we consider that the thematic approach leads to a significant portion of the portfolio being invested in positive solutions (we calculate about 75%). We were provided with a detailed explanation of the overall strategy, the ethical criteria and how each investment supported a UN Sustainable Development goal.
Whilst we are impressed with the clarity of the investment process, if the overall rating is to improve, we would like to see more evidence of engagement with investee companies and reporting of outcomes. Currently, the fund scores 0 out of 3 for positive influence, and 1 out of 3 for transparency but we hope the additional resources that are being directed to Responsible Investing will lead to some progress being made in this regard.
This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.
One for the tech fans out there. The fund invests in a company called Nvidia. Nvidia was a pioneer in the design of GPUs (Graphics Processing Units) which enhance the performance of computing platforms across a range of industries. GPUs use up to 90% less electricity than CPUs (Central Processing Units) for processing large amounts of data thus increasing energy efficiency. Artificial Intelligence (AI) is bringing about change and Nvidia is adapting its graphics chips for new applications including automated driving systems, networking in data centres, cloud computing, and medical research and development. Its products used in medical imaging have the potential to support a breakthrough in healthcare whilst Nvidia Drive is instrumental in developing autonomous computers for cars that should improve road safety and transport efficiency. Essentially Nvidia see themselves positioned at the heart of a green computing revolution, aiming to make it more sustainable and efficient.
*Source: Provider factsheet 31 December 2021
** Source: The Big Exchange Fund Assessment November 2021
Please remember that when investing, making money is not guaranteed and your capital is at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’s circumstances and may be subject to change.
The Big Exchange (TBF) Limited is a wholly-owned subsidiary of The Big Exchange Limited. The Big Exchange (TBF) Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 574048).
