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Sustainable investing opens door to exceptional opportunities

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MEDIA RELEASE: Taking a sustainable approach to investing opens the door to a breadth and depth of investment opportunities which may otherwise be overlooked, but which offer compelling returns, says Nick Edgerton, portfolio manager at Stewart Investors Sustainable Funds Group.

“The investment universe is much bigger than Amazon, Facebook and Google and for investors that don’t follow the herd, the opportunities are huge.

“For long term investors in particular, sustainable investing can unlock tremendous potential.  It incorporates companies well positioned to benefit from long term trends such as the electrification of the economy, greater eco-efficiency in industry, cleaner energy, better waste collection, recycling and reuse infrastructure, less plastic waste, and better social outcomes for people including healthy plant based foods, affordable healthcare treatment, sanitation and dignity, and access to a safe and secure digital economy”.

“For instance, we have recently found investment opportunities in electric vehicle charging infrastructure in Europe through Dutch business Alfen; hygiene consumables for women and the elderly in Asia with Unicharm; innovative COVID antibody testing equipment with Diasorin in Italy; and protection from cybersecurity risks with US business Fortinet.

“Most of these companies simply wouldn’t be on the radar of the majority of investment managers, but they are companies delivering solid and reliable returns, and at the same time contributing to a more sustainable global economy.”

Mr Edgerton said that it is clear that there has been growing interest in sustainably dedicated funds over the past 12 months, both around the world and more specifically in Australia.

“According to the RIAA Benchmark Report 2021 (released today), funds offering a true responsible investing approach have seen assets under management grow by 30 percent in the past year, while the rest of the market has shrunk”.

“This has certainly been our experience – we have been offering sustainable funds for 16 years and the funds we currently offer to Australian investors have experienced positive, and growing, inflows over the past 12 to 24 months,” he said.

As an example, Stewart Investors’ Worldwide Sustainability strategy has seen an increase in assets under management by over 30 per cent during both calendar year 2020 and financial year 2021.

“This growth is across both the institutional and the wholesale market.  Indeed in the past year it has been especially noticeable that there is increasing traction in the wholesale market as financial advisers and their clients pivot towards sustainable and responsible investing approaches”.

“It is also encouraging to see investors recognise that taking a sustainable approach doesn’t mean sacrificing returns.  The RIAA Benchmark Report 2021 highlights that global equity investors perform better than the broader market over numerous timeframes. We believe our own strong performance can be directly attributed to investing in high quality companies that are well positioned for long term sustainable development”.

“Most importantly, Australian investors don’t need to wait for the opportunity to invest in a sustainable economy. There has been rapid progress around the world in sustainable investing which we have been tapping into for 16 years,” Mr Edgerton said.

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