Hargreaves Lansdown adds Ninety One UK Sustainable Equity fund to Wealth Shortlist

Managed by Matt Evans, the strategy aims to provide growth in capital and income over the long term, while investing in companies it believes are making a positive impact on society or the environment. 

Joseph Hill, lead investment analyst at HL, said the firm thought the fund could be “a good option” for the UK portion of a responsible investment portfolio.

“The fund’s positive impact approach makes it different to other funds in the IA UK All Companies sector, and to other responsible UK equity funds,” he said. 

Hill pointed to Evans’ 24 years of experience in the industry, having joined Ninety One in 2017 and managed the fund since its launch in 2018. Prior to that, he managed funds at Columbia Threadneedle and Legal & General.

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“We think Evans is a committed and passionate sustainable investor and has the experience and resources at Ninety One to do a good job for patient investors over the long term,” he said. 

The structure of investment teams at Ninety One means that Evans collaborates and engages in debate with other UK investors, Hill noted, as well as with members of the sustainable investment team on company analysis. 

“We think this adds rigour and contributes to a positive investment environment,” he said. 

The fund excludes businesses whose activities result in significant negative impacts in society and the environment, such as those involved in the controversial weapons manufacturing, tobacco, oil & gas and coal industries, as well as violators of the UN Global Compact principles.

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Companies are then assessed for their financial sustainability, which entails digging into balance sheet strength, testing the quality of earnings to form a view on the management’s track record of allocating capital efficiently, followed by an internal sustainability assessment.

The final step is quantifying the impact that financing a company’s products or services makes to the environment, society or both by mapping it to the UN SDGs to target attractive sustainability outcomes.

This process whittles down the universe to a portfolio of 30 to 50 holdings, with its largest investments in the industrials, health care and financials sectors. 

According to Hill, the fund currently has only one overseas holding, and Evans does not tend to make use of the flexibility to invest up to 20% of the fund overseas, so he expects this fund to retain its UK focus.

In the last three years, the fund has returned 20%, while the IA All UK Companies is up 39.4% over the same period, according to FE fundinfo. The strategy is up 2.9% in the last year, while the sector has gained 3.3%.