Salt has appointed Morgan Stanley Investment Management to manage the investment portfolio.
The Fund’s investment objective is to outperform (after fees and expenses but before tax) the MSCI World (Net) Index in New Zealand dollars on a rolling three-year basis.
The Fund is a concentrated global equity strategy that typically invests in 25-50 high-quality companies trading at reasonable valuations, that can sustain their high returns on operating capital over the long term. The Fund’s intention is to have a lower carbon impact and perform better on ESG factors, relative to broad equity indices such as the MSCI All Country World Index.
The Fund’s strategy is based on the belief that owning high-quality companies can achieve sustainable high returns over the long term. When selecting companies to invest in, material social and environmental risks to the sustainability of these high returns need to be anticipated, acknowledged and assessed. The Fund will not knowingly invest in any company whose core business activity (more than 10% of a company’s revenues) involves tobacco, alcohol, adult entertainment, gambling, civilian firearms and weapons.
FUND FACTS
Benchmark - MSCI World (Net) Index
Recommended investment time frame - 5 years
Inception date - 12 July 2021
Fund Size - $56 million
1.
Strong on Engagement (2)
We engage directly-and-often with the management of companies we own. This gives us significant influence in key issues, including ESG-orientated ones.
2.
Light on Carbon (3 & 4)
The Sustainable Global Shares Fund is a reduced carbon intensity portfolio, with less than 10% of the carbon footprint of an average company in the MSCI World Index.
3.
Built on Quality (3 & 5)
The team seeks sustainably high return business that can compound over long periods. This has historically resulted in a portfolio with higher returns on operating capital and greater margin stability than its ESG peers.
Source: Factset, MSCI ESG, Morgan Stanley Investment Management
1. As at September 30, 2020. The typical range is 25-50 stocks.
2. All interactions between International Equity team portfolio managers and company management or non-executive board members from January 1, 2020 to June 30, 2020 where material E, S, or G factors discussed. Updated semi-annually.
3. Data as of September 30, 2020 for the Morgan Stanley Sustainable Global Shares Fund representative account. Updated quarterly.
4. MSCI ESG Research defines a portfolio’s carbon footprint as the carbon emissions (Scope 1 and 2) of a portfolio per million dollars invested. They sum up all the emissions in a portfolio based on the investor’s ownership share, using reported or estimated emissions data.
5. ROOCE (Return on Operating Capital Employed) = Ebita (Earnings Before Interest, Taxes and Amortization) / PPE (Property, Plant, Equipment) + Trade working capital (excludes goodwill) last twelve months (LTM), Ex-Financials. EBIT Margin Stability is (1-(std deviation)/mean)) 10-year average. Data as of September 30, 2020. Updated quarterly.
Fully integrated
ESG process
X
Free of Tobacco, Alcohol, Gambling, Adult Entertainment and Controversial Weapons or Firearms.
X
Free of Fossil Fuels, Bulk Commodities and Gas or Electrical Utilities
LATEST INSIGHTS
ENGAGE Spring 22
We have engaged directly with companies on issues material to
the sustainability of returns for over 20 years. As active managers
running concentrated portfolios and with a long-term investment
horizon, we believe we are well positioned to engage with
management on material ESG topics and influence companies
towards better practices.
ENGAGE
Engagement is a marathon, not a sprint.
All engagements are carried out by our portfolio managers and our Head of ESG Research. We don’t outsource engagement – we do it ourselves.
MARKET OUTLOOK 2021
We’re at the dawn of a new decade. Will it be a repeat of the Roaring 20s or something more subdued? Hear more from our International Equity Team’s Bruno Paulson.
GLOBAL EQUITY OBSERVER Aug. 20
In the short run, returns are driven by multiples, as has been seen by this year’s market round trip, but in the longer run, earnings dominate.
ENGAGE Spring 21
Ambitious targets for decarbonisation abound, with many companies embracing aspirations to reach 100% renewable energy use, net zero carbon emissions, or even be climate positive (removing more greenhouse gases than you emit).
GLOBAL SUSTAIN MAGAZINE
There is no doubt – ESG matters. Whether you are a company or a consumer, an asset owner or an asset manager, ESG is not a subject that you can afford to ignore.
GLOBAL EQUITY OBSERVER Oct 20
The International Equity Team’s three global strategies, on average, have earnings that are flat year to date, versus a 15% fall for the MSCI World Index as a whole. Bruno Paulson muses why high-quality compounders don’t command a larger premium.