The heart of the Endeavour investment process has always been the search for sources of return that the managers feel can be sustained over the long-term, from businesses that they believe can be relied on to deliver to expectations, the most dependable. These businesses may just as likely be operating in mature, regulated low growth sectors as innovative, dynamic secular growth sectors and displaying strong brand, technology, price, or cost leadership on the one hand, with perhaps high barriers to entry, regulatory frameworks and highly disciplined balance sheet management on the other. Seeking out the consistency of dividends, the contractual security of bond coupons and consensus estimates for steady growth - at least as a starting point - the Endeavour process naturally captures a lot of businesses where management strategy and culture reflect the highest operational standards. Amongst such standards, environmental, social and governance (ESG) issues rank increasingly prominently and often distinguish these companies as leaders in their fields. The managers of the Endeavour Fund do not negatively screen for ESG investments based on a sense of historical or subjective ethical judgement; rather the starting point for them is that company management set their goals and responsibilities prioritising the interests of the widest stakeholder community and, with pragmatism, should set the standard in their sectors for how they go about it.

For example, the managers do not consider the oil and gas sector as unethical or uninvestible per se; far from it, it would in their opinion actually be unethical to withhold capital investment from an industry that is today the mainstay of affordable energy and the basis of 100 years of relief from poverty and improved living standards for billions, whilst progressively shifting their operations towards cleaner fuels and investing in the development of the next generation of sustainable, renewable energy sources.

Likewise, it is not all carbonated drink and snack food makers who contribute to the inexorable rise in obesity and diabetes rates globally; some are leading the way with healthier ingredients, lower sugar content and replacement products and in educating their customers into new consumption habits. In another example, defence companies in and of themselves may not be considered unethical investments as defence capability in our opinion has always played a vital part in the framework of international peace. That said, some defence companies and some defence products supplied to some countries may well be considered unethical, in the managers’ opinion, and avoided as investments.

We are fortunate in western democratic countries to have the structures of government, institutions and accountability to trust that what is legal in our societies is broadly and increasingly ethical. We believe our investment and corporate engagement process makes a modest but relevant contribution to that evolution: seeking out the probable rather than speculating the possible - a philosophy of stewardship and persistence rather than outright performance - Endeavour naturally appears to capture a lot of ESG characteristics: by country and by capitalisation, by dividend and by growth, by conviction and by success, the Endeavour Fund appears to have captured more ESG factors than over 90% of the Morningstar rated fund universe in the years since the service was launched in 2015……probably one of the most naturally sustainable funds available in the market today, it is ESG that seems to have found Endeavour.