Jeff Thomson

Leading Australian and global equities boutique fund manager Alphinity Investment Management has launched a global sustainable strategy that aims to invest in quality global companies which are supporting the transition to a more sustainable future and are also identified as undervalued and within an earnings upgrade cycle.

The new Alphinity Global Sustainable Equity Fund (Fund) retains the concentrated nature and investment approach of the well-established Alphinity Global Equity Fund, which has returned 14.4% p.a.^[1] after fees since inception in December 2015 (as at 30 June 2021), but also applies the same rigorous sustainable and ESG methodology currently used by the Alphinity Australian Sustainable Share Fund (launched in 2010).

The new Fund seeks to invest in a diversified portfolio of leading sustainable companies that offer attractive financial returns, have strong ESG practices, and are aligned with one or more of the 17 UN Sustainable Development Goals (SDGs)^[2]. These SDGs cover key themes like equality, promoting healthier lives and well being, building resilient infrastructure and combating climate change.

A Sustainable Compliance Committee, including two recognised independent ESG experts, supported by Jessica Cairns, Alphinity’s ESG and Sustainability Manager, provide specialist insights and also ensure the Fund remains ‘true-to-label’ and aligned with the fund’s Charter.

Portfolio Manager, Jeff Thomson said he and the Alphinity Global team focus on companies that ‘do good’ and ‘do it well’. They also seek to avoid companies that are involved in activities that are incompatible with the objectives of the Fund, may be harmful to society and are inconsistent with the UN SDGs.

“We have a zero revenue tolerance for producers of tobacco and controversial weapons. We also don’t support companies generating more than 5% of their revenues from the production of fossil fuels, controversial fuels such as uranium, gold mining where gold is the primary purpose of the mine, factory farming, live exports, predatory lending, alcohol and gambling, and old growth forestry logging, for example.”

Mr Thomson said other no-go companies were those that have demonstrated poor management of ESG issues such as breaching human rights principles, unnecessary pollution or avoiding a fair share of tax payments.

“When we come across a grey area related to ESG issues or alignment with the SDGs the Sustainable Compliance Committee assesses the matter and determines whether Alphinity can support the company’s activities.  The Committee includes Elaine Prior, an award-winning ESG pioneer and former managing director at Citi Research in Sydney, and lawyer Melissa Stewart, a Canadian modern slavery and human rights expert.

“Only those companies that meet these stringent sustainability conditions are then assessed against Alphinity’s investment philosophy and process to ensure they are quality undervalued companies in or entering an earnings upgrade cycle and are therefore candidates for our portfolio,” Mr Thomson said.

Alphinity Investment Management is supported by Challenger Limited subsidiary Fidante Partners, which forms long term alliances with talented investment teams to support and grow specialist investment management businesses.

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[1] Source: Fidante Partners: returns are calculated after fees have been deducted and assume distributions have been reinvested. No allowance is made for tax when calculating these figures. Past performance is not a reliable indicator of future performance.
[2] ‘Strong ESG practices’ means companies that are not rated B or C by our external ESG research provider, MSCI, subject to review by the Sustainable Compliance Committee.

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Stephane Andre

Alphinity Investment Management’s Sustainable Share Fund has been added to the FirstChoice platform.

The Alphinity Sustainable Share Fund is rated Highly Recommended by Lonsec and Recommended by Zenith. It invests in between 35 and 55 companies listed on the ASX which support the United Nations’ Sustainable Development Goals, have good environmental, social and governance practices, and create positive social and economic outcomes.

The Fund is also a top performer, returning 9.1% p.a.^[1] in the ten years since its inception, 1.8% above its benchmark, the S&P/ASX300 Accumulation Index.

Alphinity Principal and Portfolio Manager Stephane Andre said Alphinity was delighted to bring an Australian sustainable fund to FirstChoice.

“Over the last decade we’ve provided investors with access to a diversified portfolio of Australian stocks listed on the ASX that have strong ESG characteristics and, where possible, contribute towards the advancement of the UN Sustainable Development Goals. By bringing the Alphinity Sustainable Share Fund to the Colonial First State FirstChoice platform we are able to reaffirm that commitment and broaden the reach of the Fund to even more investors,” Mr Andre said.

The Fund is co-managed by Stephane Andre and Bruce Smith, who are also Principals and founded Alphinity in 2010 along with Johan Carlberg and Andrew Martin.  Andre and Smith are supported by recently appointed Alphinity ESG and Sustainability Manager, Jessica Cairns along with rigorous overview by the Alphinity Sustainable Share Fund Compliance Committee, which includes independent sustainability experts Elaine Prior and Melissa Stewart.

Alphinity Investment Management is supported by Challenger Limited subsidiary Fidante Partners, which forms long term alliances with talented investment teams to support and grow specialist investment management businesses.

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[1] Source: Fidante Partners: returns are calculated after fees have been deducted and assume distributions have been reinvested. No allowance is made for tax when calculating these figures. Past performance is not a reliable indicator of future performance.

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