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STEWART INVESTORS GLOBAL EMERGING MARKETS SUSTAINABILITY A

STEWART INVESTORS GLOBAL EMERGING MARKETS SUSTAINABILITY A - Overview

Overview of STEWART INVESTORS GLOBAL EMERGING MARKETS SUSTAINABILITY A

The fund seeks to deliver long-term capital growth by investing in a multi-cap portfolio of quality global emerging markets companies which will benefit from and contribute to sustainable development.
Fund managers Jack Nelson and Sujaya Desai invest predominantly in companies based in emerging markets, but also in developed markets companies whose business is mainly based in emerging markets.
Their bottom-up investment approach targets companies based on their quality of management, their social usefulness in areas such as education or employment, environmental impacts including water and sanitation and responsible business practices. They also value quality finances and financial performance. The team are long-term investors with a six-year average holding period.
Fund holdings include information technology group Tata Consultancy Services and Brazilian cosmetics group Natura.

  • Standard Initial Charge 4.00%
  • Initial charge via Bestinvest 0.00%

Fund summary

Sector Specialist
Structure OEIC
Launched April, 2009
Size £514m
Yield 0.0%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 4.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.55%
Ongoing charges figure 1.74%

Risks

Before investing make sure you have understood the risks relevant to the fund by reviewing our Risk Warnings section. Further information on the risks are contained in the fund's Key Investor Information Document, which we make available to you before you make a decision to invest, alternatively it is available on request.

Bestinvest view

The fund benefits from having managers in place who specialise in Asia and Global Emerging Markets investing, with Jack Nelson holding the lead manager role since 2017. They have deep local expertise and contacts with Nelson based in Sydney and Sujaya Desai working out of Singapore. The team have a very clear and stable investment philosophy of finding quality companies which have predictable and sustainable growth profiles. They see this mix as being the best defence against the risk of investing in emerging markets. The fund has demonstrated attractive downside protection for clients, with its focus on consumer staples, more defensive parts of the market and a willingness to hold cash. However, it has historically tended to underperform in rising markets. This is a core option for investors looking to invest in an ethical/ sustainable GEM mandate.

Portfolio

Allocation Proportion(%)
Equity 91
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 9
Allocation Proportion(%)
UK 8
Europe 2
North America 3
Japan 7
Pacific 14
Emerging Markets 66
Allocation Proportion(%)
Large Caps 66
Mid Caps 26
Small Caps 8

View all performance data for this fund

Investment process

The investment process has four key stages beginning with Company Classification. The team look for companies delivering sustainable goods and services, responsible finance or required infrastructure. This is followed by a Quality Assessment analysing management integrity, performance, and attitude to Environmental, Social and Governance issues as well as a company’s environmental and social efficiency. It also looks at a company’s responsible business practices. Financials are also scrutinised such as a company’s long-term cash flow, innovation, and whether it has dominant economies of scale or high switching cost services. The managers avoid exposure to the majority of the “sin” sectors because they are poorly positioned for long-term sustainable development. Ideas are generated through extensive company visits, research trips, and industry contacts. The team meets a company at least once before investing. This process produces a quality list of around 300 names which are then whittled down to between 40 and 60 in the portfolio. The third stage is valuation looking to categorise each stock as either cheap, fair value or expensive, with the fourth stage encompassing investing, ongoing active engagement, and risk monitoring to improve returns. The portfolio has a bias towards Information Technology and Consumer Staples, with its main geographical exposure being to Emerging Asia followed by Latin America.

Live feed

Bid price(inc) 385.65p
Accum units 410.47p
Fund commentary 09/11/21
Fund data updated on 09/12/21

Asset allocation

Allocation Proportion(%)
Equity 91
High yield bonds 0
Quality bonds 0
Property 0
Commodities 0
Hedge 0
Fund cash 9

Equity Geographic

Allocation Proportion(%)
UK 8
Europe 2
North America 3
Japan 7
Pacific 14
Emerging Markets 66

Equity Capitalisation

Allocation Propor
tion(%)
Large Caps 66
Mid Caps 26
Small Caps 8

Top 10 holdings

As at: 31/10/2021
5.2% Housing Development Finance Corporation Limited
5.1% Taiwan Semiconductor Manufacturing
4.5% Unicharm Corp
4.4% Tata Consultancy Services
4.2% Marico
3.4% Alibaba Group Hldg Ltd
2.9% Tech Mahindra
2.8% Naver Corp
2.8% Infosys Ltd
2.7% Hoya Corp
Source: Trustnet

Sector breakdown

Information Technology 29%
Consumer Staples 22%
Financials 11%
Health Care 11%
Consumer Discretionary 10%
Industrials 8%
Cash & Cash Equivalents 5%
Communications 4%
Materials 1%

Portfolio details

The fund holds approximately 40-60 stocks.

Constraints

The portfolio usually has very little commonality with the benchmark and so performance can be expected to differ markedly on occasions.

Average monthly relative returns Bestinvest MRI
17/18 18/19 19/20 20/21 21/22   3 years 5 years Career 3 years 5 years Career
-0.89% 0.72% 0.28% -0.14% 0.19%   0.11% 0.03% 0.12% 65.50% 64.10% 80.80%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Jack Nelson

Manager. Jack Nelson is a Portfolio Manager with the Sustainable Funds Group at Stewart Investors. He joined the team in September 2011 as a graduate, becoming co-manager of the GEM Sustainability fund in 2014 and lead manager in 2017. Nelson holds a first class BA (Hons) in Politics, Philosophy and Economics from Queen’s College, Oxford.

Track record

Jack Nelson has 7.8 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.12%. During the worst period of relative performance (from May 2016 - October 2017) there was a decline of 14% relative to the index. The worst absolute loss has been 18%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 81%.

Periods of worst performance
Absolute -18% (July 2019 - March 2020)
Relative -14% (May 2016 - October 2017)

Other funds managed

Sector record since January 2014 (8 yrs)




About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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