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Liontrust Sustainable Future - Why Sustainable Investment?

Why Sustainable Investment?

Why Sustainable Investment?

Sustainable investment is not only for investors who want their investments to “do good”; there is a compelling investment case for all investors taking this approach. Long-term transformative developments, such as technological and medical advancements, not only have positive impacts on society, they have the potential to deliver returns for investors as well.

 

The Liontrust Sustainable Future (SF) fund range was launched in February 2001 with the primary aim of delivering strong returns by investing in sustainable companies. The Liontrust Sustainable Investment team, who manage these equity, bond and managed funds, have built a track record of doing so across the “very interesting” times of the last 18 years.

 

Our team focuses on finding companies that are making our world cleaner, healthier and safer. This means we spend much of our time analysing problems across the globe from climate change, through labour conditions in supply chains, to the rise of so-called lifestyle diseases.

 

Day to day, this can lead to a mindset that all these challenges are intractable, so we think it is a good idea to step back periodically and look at just what has been achieved. There has been real progress in many areas and highlights include:

 

  • Cleaner world: Air quality in cities across the world has improved. In New York, air quality is cleaner than since monitoring began, and in London, SOx and NOx and particulates are a fraction of their levels in 2000. Even in Beijing, regulation is helping to bring back blue skies.*
  • Healthier world: Perhaps the best indicator of progress here is in child mortality – deaths of children under the age of five. In China, there has been a four-fold reduction, and even in the UK with its already low rate this has fallen by 40% .**
  • Safer world: It is widely known that road deaths in the UK have halved since 2000; what is less commented on is the improvement in the workplace where accident rates have also halved. Put it another way, 400,000 accidents were avoided last year because of improvements in health and safety at work.***

 

These are a few examples of powerful improving trends we should celebrate: in general, our world has got much, much better over the last 18 years. Many of these improvements have been achieved with the help of ingenious, efficient businesses whose profits have grown in line with demand for their solutions.

 

Clearly, there are still major challenges facing our societies – from climate change to inequality, from biodiversity loss to water scarcity – but we should draw strength from the successes of the past to have optimism that we will find solutions to these too. Where these solutions are provided by companies, we will invest in them as part of our primary aim of striving to deliver strong returns through identifying and backing sustainable businesses.

 

Sustainability is an increasingly important theme for today’s consumers, with companies expected to adopt more socially responsible behaviour, and investors, with a growing proportion keen for their financial assets to have a positive impact on the wider world.

 

Sources:

*bloomberg.com/news/articles/2018-08-19/xi-s-clean-energydrive-paints-bluest-sky-over-beijing-in-decade

** Gapminder.org, UNIGME and UNWPP

*** hse.gov.uk/statistics

Investing for a cleaner, safer and healthier world

Funds

Key Risks

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. The majority of the Liontrust Sustainable Future Funds have holdings which are denominated in currencies other than Sterling and may be affected by movements in exchange rates. Some of these funds invest in emerging markets which may involve a higher element of risk due to less well regulated markets and political and economic instability. Consequently the value of an investment may rise or fall in line with the exchange rates. Liontrust UK Ethical Fund, Liontrust SF European Growth Fund and Liontrust SF UK Growth Fund invest geographically in a narrow range and has a concentrated portfolio of securities, there is an increased risk of volatility which may result in frequent rises and falls in the Fund’s share price. Liontrust SF Managed Fund, Liontrust SF Corporate Bond Fund, Liontrust SF Cautious Managed Fund, Liontrust SF Defensive Managed Fund and Liontrust Monthly Income Bond Fund invest in bonds and other fixed-interest securities - fluctuations in interest rates are likely to affect the value of these financial instruments. If long-term interest rates rise, the value of your shares is likely to fall. If you need to access your money quickly it is possible that, in difficult market conditions, it could be hard to sell holdings in corporate bond funds. This is because there is low trading activity in the markets for many of the bonds held by these funds. Mentioned above five funds can also invest in derivatives. Derivatives are used to protect against currencies, credit and interests rates move or for investment purposes. There is a risk that losses could be made on derivative positions or that the counterparties could fail to complete on transactions.

Disclaimer

The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.
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