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- Fundsmith Sustainable Equity Fund
| Fund Name | SRI Style | Product | Region | Asset Type | Launch Date |  |
|---|---|---|---|---|---|---|
| Fundsmith Sustainable Equity Fund | Sustainability Tilt | OEIC/Unit Trust | Global | Equity | 01/11/2017 | |
Fund Size: £688.00m Total screened & themed / SRI assets: £1122.00 Total Responsible Ownership assets: £32940.00 Total assets under management: £36836.00 As at: 31/07/23 Contact: ir@fundsmith.co.uk |
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OverviewAs long-term investors, ESG has always been an integral part of our investment process. We want to invest in companies that will be around forever and be able to maintain a return on capital well in excess of its cost of capital across this period. If a company were to have a significant negative impact on the environment, communities or other stakeholders in the business then it would be less capable of maintaining its excess return. Hence, we have also incorporated ESG factors in the widest possible sense in our investment process.
Our approach is to be a long-term investor in our chosen stocks and our investment strategy is built around a simple 3 step strategy: buy good companies, don’t overpay, and do nothing. We will invest in equities on a global basis and will not adopt short-term trading strategies.
For the interests of time and completeness a full description of how we incorporate ESG factors into our investment process please see our Responsible Investment Policy (https://www.fundsmith.co.uk/media/swxplrtk/responsible-investment-policy.pdf) and our Stewardship Report (https://www.fundsmith.co.uk/media/ixubdiog/fundsmith-stewardship-report-2022.pdf). |
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FiltersFund informationSustainabilityEnvironmental policy Sustainability policy Limits exposure to carbon intensive industries Sustainability theme or focus Favours cleaner, greener companies Sustainability focus Encourage more sustainable practices through stewardship Climate Change & EnergyNuclear exclusion policy Coal, oil & / or gas majors excluded Fracking and tar sands excluded Arctic drilling exclusion Fossil fuel reserves exclusion Fossil fuel exploration exclusion - direct involvement Fossil fuel exploration exclusion – indirect involvement Ethical Values Led ExclusionsTobacco and related product manufacturers excluded Armaments manufacturers avoided Gambling avoidance policy Pornography avoidance policy Gilts / government bonds - exclude all Gilts / government bonds - exclude some Governance & ManagementGovernance policy Avoids companies with poor governance UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy ESG factors included in Assessment of Value (AoV) report Asset Size & MetricsOver 50% large cap companies Invests mostly in large cap companies How The Fund WorksLimited / few ethical exclusions* Negative selection bias Focus on ESG risk mitigation Significant harm exclusion SRI / ESG / Ethical policies explained on website All assets (except cash) meet published sustain'y criteria Intended Clients & Product OptionsIntended for investors interested in sustainability Available via an ISA (OEIC only) Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership / stewardship policy or strategy (AFM company wide) Responsible ownership policy for non SRI funds (AFM company wide) Diversity, equality & inclusion engagement policy (AFM company wide) Boutique / specialist fund management company Vote all* shares at AGMs / EGMs (AFM company wide) Integrates ESG factors into all / most fund research ResourcesIn-house responsible ownership / voting expertise Employ specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies Collaborations & AffiliationsPRI signatory Investment Association (IA) member AccreditationsUK Stewardship Code signatory (AFM company wide) Engagement ApproachEngaging on climate change issues Engaging on labour / employment issues Engaging on governance issues Engaging on responsible supply chain issues Company Wide ExclusionsControversial weapons avoidance policy (AFM company wide) TransparencyPublish full voting record (AFM company wide) Publish responsible ownership / stewardship report (AFM company wide) Full SRI policy information on company website |
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PolicyThe Fundsmith Sustainable Equity Fund (FSEF) will not invest in businesses which have substantial interests in any of the following sectors:
In addition, we apply further criteria to screen investments in accordance with our . We evaluate sustainability in the widest sense, taking account not only the companies handling of environmental, social and governance policies and practices but also their policies and practices on research and development, new product innovation, dividend policy and the adequacy of capital investment.
All research is done in-house using data from Bloomberg or reported by the company. We collect any positive or negative qualitative ESG and innovation information and store it in our ESG and innovation Database. We use RepRisk alongside this as a proxy for public sentiment towards companies and absolute impact, and to catch any coverage we may have missed. We record key quantitative ESG data, such as greenhouse gas emissions, employee diversity, board diversity in a separate database and use this as a look-through for our portfolios against a comparable index. |
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ProcessSee SRI / Ethical policy
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Resources, Affiliations & Corporate StrategiesAll of our research is done in-house, and we are signatories of the UN PRI and the UK Stewardship code. We monitor company news on a daily basis in the morning news, which has pretty detailed coverage of daily news flow. This covers much of the qualitative news. On a monthly basis we look the weighted environmental impact stats and the RepRisk of the portfolio. The RepRisk score, which is a measure of reputational risk from ESG factors, acts as a proxy for absolute impact and covers any news we may have missed.
Tom Boles is Head of Sustainability. The analysts on the Fundsmith Equity Fund and Fundsmith Sustainable Equity Fund are Daniel Washburn, Tom Boles and Frank Diebold who each integrate ESG considerations when analysing a company. As long-term shareholders, we consider this to be an important factor in selecting companies that can sustain a high return on capital.
Julian Robins also does analytic work on the Fundsmith Equity Fund and the Fundsmith Sustainable Equity, while he is also the Head of Research.
Terry Smith is the fund manager and makes all final decisions. The firm-wide Responsible Investment policy can be reviewed at: https://www.fundsmith.co.uk/docs/default-source/responsible-investment-policy/responsible-investment-policy.pdf
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Literature
Disclaimer An English language prospectus for the Fundsmith Sustainable Equity Fund is available on request and via the Fundsmith website and investors should consult this document before purchasing shares in the fund. Past performance is not necessarily a guide to future performance. The value of investments and the income from them may fall as well as rise and be affected by changes in exchange rates, and you may not get back the amount of your original investment. Fundsmith LLP does not offer investment advice or make any recommendations regarding the suitability of its product. This financial promotion is intended for UK residents only and is communicated by Fundsmith LLP which is authorised and regulated by the Financial Conduct Authority. Last amended: 19/09/23 01:43 |
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Important information
This report is for information purposes only and is intended to complement existing services used by UK based financial advisers only. sriServices is not authorised to give investment advice. The information on this site does not in any way constitute advice, recommendation or endorsement of any product or service. Investment decisions should not be based on this information alone. sriServices cannot be held in any way responsible for decisions made or advice offered as a result of using this site.
Whilst we take care to ensure information is as accurate as possible at time of publication we recommend you/financial advisers confirm specific fund details with fund providers. Please see www.sriServices.co.uk for additional information and for our contact details.
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05/06/2024