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Stewart Investors launches GEM Leaders Sustainability fund

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MEDIA RELEASE: Stewart Investors, an active, long-only equity specialist and global leader in sustainable investing, has launched a Global Emerging Markets (GEM) Leaders Sustainability fund for Australian investors.

The Fund invests in high-quality, mid- to large-cap companies that are considered to be well positioned to benefit from, and contribute to, sustainable development, with a focus on delivering long-term capital growth over market cycles.  Managed by Jack Nelson and David Gait, Sydney-based portfolio managers for the firm’s Sustainable Funds Group, the Fund offers Australian investors access to the team’s proven emerging markets sustainability capabilities.

The team has a strong track record of investing in emerging markets. Since its inception in February 2009, the Stewart Investors Global Emerging Markets Sustainability Fund, which is an All-Cap strategy, has delivered an annualised return of 13.4%, net of fees, (as at 31 August 2021), compared with a 9.1% return for its benchmark, the MSCI Emerging Markets Index, net of withholding tax.

The GEM Leaders Sustainability Fund now launched in Australia focuses on companies with a market capitalisation of over US$1 billion. The Fund can hold between 25 – 60 investments at any one time. The minimum suggested timeframe for investors is seven years. The GEM Leaders Sustainability strategy was first launched outside Australia in April 2020 and currently has assets under management globally of A$376m (as at 31 August 2021).

Stewart Investors’ Sustainable Funds Group is a pioneer in sustainable investing, having launched its first sustainability fund in 2005. The Group is supported by the heritage of Stewart Investors, dating back to 1988. In its recent annual benchmark report, the Responsible Investment Association Australasia (RIAA), named Stewart Investors a ‘Responsible Investment Leader’, its highest designation. This acknowledges its commitment to responsible investing; explicit consideration of environmental, social and governance factors in investment decision making, strong and collaborative stewardship; transparency in reporting activity, including the societal and environmental outcomes being achieved.

The team aims to achieve positive social and environmental outcomes by avoiding companies that participate in harmful and controversial practices, as well as investing in, and engaging with, companies that support positive contributions – socially and environmentally – such as health and wellbeing, financial inclusion, waste, water and energy efficiency and renewable energy.

Jack Nelson, portfolio manager, Stewart Investors’ Sustainable Funds Group, said: “Emerging markets offer particular opportunities as well as challenges for investors.  Investing in these countries offers the opportunity to find high quality companies that are addressing sustainable development challenges earlier in their lifecycle than in developed economies.The political and economic environment of each country can vary significantly, and this has a direct impact on companies, so the context in which each operates needs to be given full consideration.  Having a strong focus on sustainability is therefore crucial in identifying the best opportunities, which we believe is the most effective way to protect and grow our clients’ capital over the long term.”

David Gait, portfolio manager, Stewart Investors’ Sustainable Funds Group, added: “We have seen significant appetite for our global emerging markets capability in Australia and, in particular, for an emerging markets fund that has a strong sustainability focus, which is a key point of differentiation from others in the market.”

The Sustainable Funds Group has its own microsite dedicated to their Sustainability Strategies. This includes an interactive map which allows easy access to details on the companies held in their strategies and how they are contributing to sustainable development. Users can filter the map by Sustainable Development Goals or individual company names. For each company the team holds, the investment rationale, sustainability positioning, risks and areas for engagement are provided.

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