20 Years of Sustainable Investing - International - Flipbook - Page 3
20 years of the Sustainable Future Strategies
Twenty years ago on 19 February 2001, the Sustainable Future (SF) Strategies launched in the
UK and I was an assistant manager on the team led by Clare Brook. As still stands today, the
initial goal of the Strategies was to deliver strong returns by investing in sustainable companies.
In addition, the team committed to
engage with companies on behalf of
clients to encourage best practice on
environmental and social issues.
At the time, these were radical
notions. Most investors were certain
Peter Michaelis, Head of
that incorporating ‘goodness’ or
the Liontrust Sustainable
positive impact into investment was
Investment Team
a distraction at best and, at worst,
guaranteed to deliver worse returns. Equally, the prevailing mindset
remained in line with Milton Friedman’s dictum that the business of
business is business, meaning shareholders should only care about
profit maximisation and not worry about how it is achieved.
A quote from the launch of the first SF Strategies highlights how we
were looking to think differently:
This is not an idealistic approach to investing: environmental and social
issues regularly affect stock prices with dramatic results.’ – Clare Brook,
Head of the Socially Responsible Investing (SRI) Team.
Our Strategies launched successfully and grew modestly, even as the
2001 tech bubble deflated. Early clients were those individuals and
institutions that cared deeply about how their money was invested;
they wanted strong returns but did not want to compromise their
principles in achieving them. It was our belief that this group of
investors would grow if we could show sustainable investing worked.
Let us look back and see how we have fared over the subsequent
20 years. We have always compared ourselves to mainstream
benchmarks and funds and, on this basis, have delivered better
returns than relevant comparator benchmarks in four of the six
Strategies, as the bar chart below highlights.
‘We believe the companies and industries that will perform best in the
21st Century are precisely those that consider how their actions will
affect the world in 25 or 50 years’ time. We expect companies with
such vision to be best placed to seize the opportunities arising from
environmental, social and political changes. The widely held notion that
SRI necessarily produces inferior performance is wholly wrong: numerous
SRI funds have consistently outperformed their mainstream equivalents.
2003
World Development
Report draws attention
to the fact 2.8 billion people are living
on less than $2 a day, almost all in
developing countries.
SF Strategies versus comparator benchmarks over 20 years*
350%
300%
250%
200%
150%
100%
MSCI World
Liontrust Sustainable
Future - Global
Growth Equities
IA Flexible
Investment sector
Liontrust Sustainable Future
– Global Managed
Growth Equities
iBoxx Sterling
Corporate All Maturities
Liontrust Sustainable Future
– Corporate Fixed Income
IA Mixed Investment
40-85% Shares sector
Liontrust Sustainable Future –
Managed Multi-Asset
MSCI Europe ex UK
Liontrust Sustainable Future
– Continental European
Growth Equities
MSCI UK
0%
Liontrust Sustainable Future
– UK Growth Equities
50%
Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from it can fall as well
as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. *Composite returns
source: Liontrust and FE Analytics, primary share classes, net of fees, versus comparator benchmarks (for Liontrust Sustainable Future – Managed MultiAsset and Liontrust Sustainable Future – Global Managed Growth Equities, these are UK IA peer groups). These track records are from 19.02.01 to
28.02.21. For the purposes of GIPS, the composites were created on 01.01.09 but the strategies have been managed by the Sustainable Investment
Team since inception. The returns are therefore a combination of performance from launch to end 2008, prior to GIPS compliance, and GIPS-compliant
returns from 1 Jan 2009. For Liontrust Sustainable Future – Corporate Fixed Income, the GIPS compliance date is 01.09.12.
Liontrust: 20 Years of Sustainable Investing - 3