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Stewart Investors Global Emerging Markets Sustainability B

Global emerging markets fund, which invests in companies that are likely to benefit from and contribute to sustainable development.

  • 402.46p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.90%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.94%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 0.60%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 27 January 2022, fund commentary last updated 09 November 2021

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.

Fund summary

Sector Specialist
Structure OEIC
Launched April, 2009
Size £514m
Yield 0.60%
Charging basis Income
Dividends paid Acc units only

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.90%
Ongoing charges figure 0.94%

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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.

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.

Manager research

Average monthly relative returns

  • 17/18 -0.89%
  • 18/19 0.72%
  • 19/20 0.28%
  • 20/21 -0.14%
  • 21/22 0.19%

Bestinvest MRI

  • 3 years 0.11%
  • 5 years 0.03%
  • Career 0.12%
  • 3 years 65.50%
  • 5 years 64.10%
  • Career 80.80%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Jack Nelson

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 -18.00% (July 2019 - March 2020)
Relative -14.00% (May 2016 - October 2017)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 December 2021

5.4% Taiwan Semiconductor Manufacturing
5% Tata Consultancy Services
4.9% Unicharm Corp
4.8% Housing Development Finance Corporation Limited
3.6% Tech Mahindra
3.3% Marico
3.1% Mahindra & Mahindra
2.8% Hoya Corp
2.7% Infosys Ltd
2.6% Naver Corp
Source: Trustnet

Sector breakdown

Information Technology 29.00%
Consumer Staples 22.00%
Financials 11.00%
Health Care 11.00%
Consumer Discretionary 10.00%
Industrials 8.00%
Cash & Cash Equivalents 5.00%
Communications 4.00%
Materials 1.00%

Portfolio

The fund holds approximately 40-60 stocks.

Key Investor Information

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