Brown Advisory, a USD76 billion, employee-owned, global investment firm, has launched the Global Leaders Sustainable Fund under its Dublin-UCITS umbrella.
The new UCITS Fund adds environmental, social and governance (ESG) screens to Brown Advisory’s top quartile performing Global Leaders Strategy. The addition of the ESG screens has been made in response to client demand.
Managed by Mick Dillon and Bertie Thomson, the fund follows the same philosophy and process that the team has employed since May 2015 when the Global Leaders strategy was launched. The Global Leaders Sustainable Fund expands on the ESG integration that is already built into their bottom-up research process by adding back-end screens to avoid certain business controversies, such as military equipment, alcohol and tobacco, as requested by its clients. Two holdings currently fall foul of the screens and are therefore excluded; these investments will not be replaced with other stocks, instead the residual capital, which accounts for around 5 per cent of the portfolio, will be reinvested across the remaining holdings.
Mick Dillon (pictured), Portfolio Manager of the Global Leaders Sustainable Fund, says: “We are pleased to have been able to respond to our clients by offering a solution that widens the appeal of our successful Global Leaders strategy through this subtle adaptation.”
Bertie Thomson, Portfolio Manager of the Global Leaders Sustainable Fund, adds: “To us, corporate sustainability is primarily good business sense that goes hand-in-hand with long-term value creation. Our strong track record in ESG analysis, combined with our fundamental analysis, means we can drive attractive long-term performance and risk protection for our investors.”
The Fund is a concentrated portfolio of leading global companies that are expected to deliver exceptional customer outcomes. By performing deep, bottom-up fundamental analysis, the portfolio managers seek to identify companies in any sector or country that are capable of compounding excess economic returns over long periods of time. Since inception in May 2015, and on a three and one-year basis, the Global Leaders strategy has consistently outperformed its benchmark, the FTSE All-World Net Index, and now has some USD730 million AUM. The Global Leaders Fund is up over 25 per cent year to date vs c 18 per cent for the benchmark.
The Global Leaders Sustainable Fund further strengthens Brown Advisory’s range of sustainable investment strategies, which includes the US Sustainable Growth Fund and the All Cap SRI Fund. The US Sustainable Growth Fund is Brown Advisory’s flagship sustainable equity strategy, managed by Karina Funk and David Powell, which focuses on integrated ESG research seeking companies with Sustainable Business Advantages (SBA).
Key to Brown Advisory’s overarching investment philosophy is a belief that ESG strengths are positive drivers of long-term business franchise sustainability and management teams that incorporate ESG factors into their philosophy create value for all stakeholders over time. Some of the most attractive, durable business models in the large-cap equity universe are those with sustainable drivers at their core.
