CT RESPONSIBLE GLOBAL EQUITY 2

Investment Process

The fund begins with an investment universe of 5,000 stocks, which after a five-stage process is whittled down to between 40 and 60 high conviction holdings in the final portfolio. The first stage is the generation of ideas, which are derived from a combination of company meetings, industry conferences, sector/theme research and ESG research by the investment team. Around 1,000 stocks make it through to the next stage which involves the use of positive and negative ethical and sustainability screening. This is largely carried out by the Responsible Investment Team and the Advisory Council. Companies are screened against defined criteria, with the aim of finding those which stand to benefit from or substantially contribute to trends in sustainable development. The fund also requires companies to meet sector standards on social and environmental impacts, including systems for managing labour standards, human rights, supply chains, water, waste, and biodiversity. The process also excludes sectors such as tobacco, alcohol, weapons, gambling, nuclear and pornography. Stocks that make it through this process are placed on a 100-strong watch list. An in-depth company and valuation analysis then takes place before they are considered for portfolio inclusion. As part of this the team looks at areas such as a company’s competitive advantages, long-term growth drivers, strong sustainability characteristics and whether it has a proven management team. The fourth stage is portfolio construction, which is the main responsibility of manager Jamie Jenkins. The fifth and final stage of the process is active ownership and reporting, which is the responsibility of the portfolio managers and the responsible investment teams.