Global Sustainable Equity Fund

Product Name

Global Sustainable Equity Fund

Issuer

Alphinity Investment Management

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale, Institutional

Certified Since

2021

Asset Classes

International equities

Markets

New Zealand, Australia

Investment Approaches

Sustainability themed, Negative Screening

It Includes:

  • Riaa icons 14 Education
  • Riaa icons 32 Green property
  • Riaa icons 12 Healthcare and medical products
  • Riaa icons 10 Renewable energy and energy efficiency
  • Riaa icons 15 Social and sustainable infrastructure
  • Tree green background Sustainable land and agricultural management
  • Riaa icons 13 Sustainable transport
  • Riaa icons 31 Sustainable water

It has some level of screening for:

  • Riaa icons 41 Alcohol
  • Riaa icons 56 Animal cruelty
  • Riaa icons 33 Fossil fuels
  • Riaa icons 42 Gambling
  • Riaa icons 52 Human rights abuses
  • Riaa icons 38 Labour rights violations
  • Riaa icons 34 Logging
  • Riaa icons 50 Nuclear power
  • Riaa icons 99 Pornography

It fully excludes:

  • Riaa icons 36 Armaments
  • Riaa icons 35 Tobacco

Overview

The Fund is managed by Alphinity and seeks to invest in a diversified portfolio of leading sustainable companies, which are aligned with one or more of the United Nations’ Sustainable Development Goals (SDGs), with strong ESG characteristics, and which are also identified as undervalued and within an earnings upgrade cycle.


Description


Society faces significant challenges to achieve sustainable development. Alphinity aims, through this Fund, to play a role in helping to address these challenges. Alphinity is committed to supporting companies we consider contribute to long-term sustainability and avoiding those that do not. Alphinity believes engagement can encourage companies to improve practices and contribute to sustainable development. Alphinity seeks companies that, along with offering attractive financial returns, have strong ESG practices and have the capacity to contribute towards the advancement of the UN Sustainable Development Goals agenda, as that agenda evolves. 
 
We seek to avoid companies that are involved in activities we consider incompatible with the objectives of the fund, as they may be harmful to society and/or inconsistent with the achievement of the UN Social Development Goals. We therefore have a zero revenue tolerance for producers of tobacco and controversial weapons. We also don’t support companies which generate more than 5% of their revenues (cumulative) from producing or operating in the following areas:

  • Fossil fuels (including extraction, production and electricity production from energy coming from fossil fuels), such as Thermal Coal, Natural Gas and Oil, unless the company has a clear and credible commitment to divest from the use of fossil fuels within a reasonable timeframe. This divestment commitment should also be supported by clear emissions reduction targets and commitments which are compatible with the Paris Agreement (i.e. net zero by 2050);
  • High-impact fossil fuels such as Coal Seam Gas, Oil Sands and those drilling in Arctic regions, regardless of any emissions commitments they might make;
  • Production of controversial fuels such as Uranium;
  • Gold mining, where Gold is the primary purpose of the mine;
  • Factory farming, animals in entertainment, live exports and animal testing for cosmetic products, as well as other activities which are associated with animal welfare concerns. For healthcare, we tolerate testing only where necessary, that is where the benefits to humans are significant and procedures meet internationally recognised standards. We also require policies related to animal testing are in place;
  • Predatory lending and hostile debt collection;
  • Addictions such as Alcohol and Gambling;
  • Old growth forest logging and non-RSPO palm oil; and

We have zero tolerance for companies producing tobacco products and controversial weapons.

An important feature of the Fund is the Global Sustainable Compliance Committee. The Compliance Committee consists of two highly-qualified independent sustainability experts and the two co-Portfolio Managers of the Fund. The Committee has a number of roles including ensuring the Fund complies with the Charter, helping to identify areas of company engagement and reviewing the external service providers who provide ESG data.
  
Once the universe has been defined using the above steps, the Fund applies Alphinity's investment philosophy and process that seeks quality, undervalued companies in or about to enter an earnings upgrade cycle, using its process combining Fundamental and Quantitative research.
 
The result is a balanced portfolio of 25-40 companies with attractive investment fundamentals and prospects. Alphinity does not identify with any particular investment style as our approach has proven successful through a number of different market cycles, although the Alphinity process may have a slight bias towards growth.

Other products certified by the Responsible Investment Association Australasia (RIAA)

Alphinity Sustainable Share Fund

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