Pengana WHEB Sustainable Impact Fund

Product Name

Pengana WHEB Sustainable Impact Fund

Issuer

Pengana Capital

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale

Certified Since

2017

Asset Classes

International equities

Markets

Australia, New Zealand

Investment Approaches

Sustainability themed, Impact investing

It Includes:

  • Riaa icons 14 Education
  • Riaa icons 12 Healthcare and medical products
  • Riaa icons 11 Impact investments
  • Riaa icons 10 Renewable energy and climate change solutions
  • 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
  • Investment2 More sustainable companies

It fully excludes:

  • No exclusions4 No exclusions

Overview

The Pengana WHEB Sustainable Impact Fund invests in a diversified global portfolio of companies with activities identified by WHEB as providing solutions to the challenges of sustainability. The Fund’s portfolio holds predominantly listed global equities. The strategy features active stock-picking with individual stocks being selected through a rigorous ‘bottom-up’ stock-by-stock fundamental research process. The Fund’s investment objective is to achieve capital growth over the medium to longer term. Pengana Investment Management Limited (Pengana) is the responsible entity of the Fund and has appointed WHEB Asset Management LLP as the investment manager for the Fund.


Description


Investment Philosophy

We live in a rapidly changing world. Successful thematic investing is about understanding these changes and investing in those parts of the market that benefit from them, while avoiding those that suffer.

WHEB have identified four ‘mega-trends’ that are exerting a powerful influence over the development of the global economy:
  1. Resource scarcity 
  2. Ageing population
  3. Rising population and living standards
  4. Globalisation

WHEB believe that these trends will persist for decades and are creating real market opportunities for companies providing solutions to mitigate or ease the challenges that these forces create. WHEB also believe that companies which create positive social and/or environmental impacts, through their products and services and the manner in which they conduct their business, will ultimately enjoy structurally growing markets and will see resilient profitability.

WHEB have selected nine investment themes which are used to focus their attention on companies that provide solutions to the sustainability challenges posed by these mega-trends and therefore have the potential to significantly grow their earnings.

Investment Process

The Fund’s investment team builds and maintains a universe of potential investment opportunities which have been classified as companies providing solutions to sustainability challenges and categorised within WHEB’s nine sustainable investment themes – five of these are environmental (cleaner energy, environmental services, resource efficiency, sustainable transport and water management) and four are social (education, health, safety and well-being). To qualify for WHEB’s universe, companies need to have a market capitalisation of at least US$200m, and at least one third of profits or revenues directly exposed to WHEB’s themes. This universe was first established in 2005, is reviewed on an ongoing basis and has since evolved to include more than 1,000 companies.

From WHEB’s universe, the investment team conduct an in-depth review of new candidates for inclusion in the portfolio. Candidate companies are selected using quantitative screens to evaluate quality, or following thematic research carried out by the team. Potential investments are then evaluated using a systematic approach by building a profile on each company which includes an evaluation of its financial characteristics and quality, integrated with an assessment of the ESG opportunities and threats to the business. This forms a basis on which to evaluate the investment case for each portfolio candidate.

Position sizes are usually between 0.5% and 2.5% of the portfolio, and all members of the investment team are involved in the monitoring and analysis of the total portfolio. The expected holding period is between 3 and 6 years. The investment process has a disciplined approach to valuation. Positions are usually sold if they are no longer considered to be attractively valued, or if corporate quality or the growth opportunity has changed materially.

The expected outcome of the investment process is a portfolio which is exposed to structurally growing markets, through companies which have positive social and environmental impacts underpinning this growth. It will have materially different exposures when compared with broad global equity indices, and is expected to be biased to mid-cap and higher quality companies.

Sustainability & Positive Screening: The Fund invests in a diversified global portfolio of companies with activities identified by WHEB as providing solutions to the challenges of sustainability via nine sustainable investment themes – five of these are environmental (cleaner energy, environmental services, resource efficiency, sustainable transport and water management) and four are social (education, health, safety and well-being).

Impact Investing: WHEB produces an Annual Impact Report which measures, calculates and reports on the extent of positive social and environmental impact from investing in the strategy.

ESG Integration: WHEB’s approach to ESG issues in their investment process is to consider these issues at all stages of analysis and as an integral part of an assessment of the quality of the business overall.

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

Pengana International Equities Limited (ASX: PIA)

Pengana High Conviction Equities Fund

Pengana International Fund - Ethical Opportunity

Pengana International Fund - Ethical

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