Liontrust Sustainable Future Funds - Annual Review 2017 - Page 5



Executive summary
••We maintain a strong long-term performance track
record to the end of 2017.
••All our funds (equity, fixed income and managed)
outperformed their IA sector average over three, five,
seven and 10 years to the end of 2017. Six out of
eight were first quartile over five years.*
••2017 was also a strong year in performance
terms, with all our funds first quartile versus their IA
sector average.*
••Impact analysis shows our Funds are focused on
companies having a positive effect on people and
the environment, evidenced by exposure to themes,
United Nations Sustainable Development Goals
(SDGs) and other indicators. Our funds, for example,
continue to emit significantly less CO2 – 70% on
average – from their operations than their benchmarks.
••In 2017, our team had 226 face-to-face meetings to
discuss key engagement issues.
We have always believed there is no trade-off between
investing in companies doing good and delivering
good investment returns. Indeed, we believe companies
producing goods and services that have a positive impact
on people and our planet have a competitive advantage
that is often overlooked.
This belief has been
the bedrock of the
Sustainable
Future
approach since we
launched our first
funds in 2001.
Over many years,
we have put this into
practice,
helping
our clients meet
their objectives while
also investing only in
companies having a
positive impact.
Ratings
We are pleased to observe there are a number of factors
driving a growing interest in and demand for sustainable
investment, both in the UK and internationally.
Consumers increasingly want what they wear, eat and
drive to benefit themselves and have a positive impact
on the world around them. In the food and clothing
industries, for example, sustainability is becoming
synonymous with quality (and so it goes in investment).
People expect the companies they use to be socially
responsible and this is fundamentally changing
businesses, from high street retailers to industrials and
even commodity producers.
Meanwhile, the political climate continues to change,
with environmental and related social impacts now
regarded as mainstream issues and policy increasingly
decided with sustainability in mind.
Given these developments, we believe interest in and
demand for sustainable investment will only continue
to grow.
A further factor driving increasing sustainable investing
– and a key one for us at Liontrust – is the growing
realisation that people do not need to sacrifice financial
returns to meet their values.
The Sustainable Investment team joined Liontrust in April
2017, bringing 11 funds with us. The first year in our
new home has been a great success, both in terms of
performance and sales.
Assets under management in our sustainable range have
increased by £500 million over 12 months to the end
of March 2018 to reach nearly £3 billion. This was
on the back of another strong year for the Sustainable
Future Funds in performance terms, building on a longterm record.
In this review, we explain what has been behind
this success and the emerging themes in sustainable
investing. We also examine the positive impact of our
holdings on society and the environment and the success
(or otherwise) of our engagement with these companies.
Central to our approach to sustainable investing is
the fact that all these elements are integrated
Rayner
Spencer Mills
SRI Rated
Morningstar
Sustainability
Rating
Morningstar
Rating
SF Global Growth
3
SF European Growth
4
SF UK Growth
4
SF Absolute Growth
4
SF Managed
5
SF Cautious Managed
5
SF Defensive Managed
5
SF Corporate Bond
4
UK Ethical
-
3
Monthly Income Bond
-
4
3D Investing
Rating
Money Facts
Ethical and
SRI Rating
-
-
FE Crown
Rating
within a single team. We do not have separate fund
management and environmental, social and governance
(ESG) divisions. Instead, every team member is
responsible for all aspects of financial and ESG relating
to an investment decision.
We have developed this approach over more than
17 years as we believe it is the best way to deliver
investment performance. Our track record strongly
supports this view and this review is designed to provide
an insight into our process, impact and engagement.
Because of this approach, our team engages with
companies across a broad range of issues relating to
steps in our investment process, including screening
criteria, sustainable investment themes and companyspecific ESG issues.
We conclude this review by looking to the future and
what we expect to see over the coming years.
Peter Michaelis, Head of Sustainable Investment
*Source: Financial Express, as at 31.12.17, total return (net of fees, income and interest reinvested), primary share class, in GBP. Five year data is
not available for Sustainable Future Cautious Managed Fund and Sustainable Future Defensive Managed Fund due to the launch date of the portfolio.
Past performance is not a guide to future performance. Do remember that the value of an investment and the income
generated from them 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.
Liontrust Sustainable Future Funds: Annual Review 2017 - 5





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