Medical Money Management > Knowledge Centre > FUND FOCUS: The Stewart Investors Worldwide Sustainability Fund

FUND FOCUS: The Stewart Investors Worldwide Sustainability Fund

Medical Money Management (MMM) operate a series of risk-targeted Investment Portfolios with a bias towards Ethical, Environmental and / or Sustainability themes, each incorporating a number of investment funds, selected after significant research and fund manger interviews. We regularly provide an insight into some of the funds that we are currently using.









Why is the Fund held in the Portfolios?

The investment approach behind the Stewart Worldwide Sustainability fund integrates sustainable development thinking at every stage of the investment process, with the objective of generating investment returns over the long term. Sustainability means questioning how companies respond to sustainable development challenges and how well they are positioned to benefit from, and contribute to, sustainable development.

Within traditional industries, the fund will seek to identify, and invest in, good quality management teams with the vision and the ability to successfully manage the specific environmental, human rights, social and governance risks and opportunities facing their companies. Potential investment opportunities are classified into one of three categories, namely sustainable goods and services, responsible finance and required infrastructure. These categories are not used as screens; rather they help the fund management team think more clearly about the long-term sustainable positioning of different types of businesses. Practically all companies will fall into one of these categories, and the managers use them to help define the critical sustainable development issues that they need to consider as part of their fundamental analysis.

Every six months, the fund is screened by an external sustainability adviser against a series of internationally agreed sustainability standards for business, including the UN Human Rights Norms for Businesses and the UN Global Compact Principles.

What makes it different from other funds in its sector?

The Fund Manager invests in those companies that he believes are particularly well positioned to deliver positive long-term returns in the face of the huge sustainable development challenges facing all countries today. Their emphasis is on sustainable development and not ‘green’, ‘clean tech’ or ‘ethical’ investing.

Are the sustainable funds the same as ethical investment funds?

No, not in the traditional sense. The fund managers do not look to screen out particular companies or sectors on moral or ethical grounds. However, they are not afraid of the word “ethics.” Indeed, they think that the finance sector as a whole does not spend enough time talking about ethics. The fund management team spends a considerable amount of time reflecting on their role as stewards and has signed the Company’s ‘Financial Hippocratic Oath’, a commitment to uphold specific ethical standards when investing clients’ money.

2ndThe Fund Manager

David Gait is responsible for leading the Stewart Investors Sustainable Funds and generating investment ideas across all sectors in emerging and developed markets. David joined the company in 1997, and holds an MA with honours in Economics from Cambridge University, and an MSc in Investment Analysis from Stirling University. Compared with his peers, David has consistently outperformed on a risk adjusted basis over many years, recognised by his AA rating from Citywire and “Alpha Manager” rating from Financial Express.


Stewart Worldwide Sustainability

Fund Ratings

Whilst MMM tends not to consider external ratings when selecting suitable investment funds, preferring to rely on internal research and interviews with the individual Fund Management teams, it is interesting to note ratings that the Fund has received:



















The Fund was launched in October 2012 although the fund manager has been running Sustainability themed funds since 2005. Since the fund launched has grown to £210m in size as at 31/03/2016. The graph below shows the Fund’s performance against its own benchmark of the MSCI All Companies World index, and the sector in which the Fund sits, being the Global equity sector.



An example of some of the stocks held in the fund.

12thSpun-out from ITT in 2011, Xylem is the world’s largest wastewater and dewatering pumps provider, the largest in the membrane market doing filtration and disinfection of water, and second largest in water testing. The Company’s focus on water technology leadership means it is well placed to help tackle pressing sustainable development challenges around water scarcity and water pollution in both developed and developing countries. As the Company itself notes, ‘There is a direct line of sight from our work to the sustainable health of our planet.’


13thFounded in 1668, Merck is the world’s oldest operating chemical and pharmaceutical company. Its focus remains on contributing towards improved human development and better health outcomes globally. The founding family still owns a 70% stake and the KGaA structure (family members are personally liable partners) ensures their long-term stewardship and alignment.

16thManila Water provides water, wastewater and other environmental services to homes and businesses in the Philippines and Vietnam. The company’s vision is “to become a leader in the provision of water, wastewater and other environmental services which will empower people, protect the environment, and enhance sustainable development.”

Manila Water has a strong track record of improving the quality of water provision in Manila without unduly raising prices. By engaging with customers the company has cut water leakage (and water theft) far more successfully than they could have done from the executive floor.  The company’s commitment to sustainable development and social responsibility has enhanced its licence to operate and supported its convincing financial performance. It is one of the most profitable water companies in the world achieving a profit margin of 30%-45% over past three years.

The company is controlled by the Ayala family, which has a strong approach to corporate governance. All Ayala companies report on sustainability and incorporate it clearly into their business strategy. Moreover, the Ayala family has a history of treating minority shareholders fairly.

17thMarico is one of India’s leading Consumer Products and Services companies in the global beauty and wellness space. The Company’s flagship product is Parachute, an edible grade coconut oil, designed for hair care but also used in cooking. Using cashflows from Parachute, Marico have successfully built up a strong suite of trusted brands in personal care and healthy foods.

Marico has a successful long-term track record, quality management, a risk aware culture, an independent board, and a portfolio of strong brands in underpenetrated categories. The company is steadily building a business in other emerging markets such as Bangladesh, South East Asia, Africa and the Middle East where consumer behaviour is similar to India. We believe Marico can continue to deliver sustainable growth over the next decade as it is well positioned in fast growing markets and categories with strong sustainability tailwinds.
MMM would like to thank Stewart Investors and Ethical Screening for its assistance in the compilation of this Fund Focus article.

Please note that past performance is no guarantee of future performance and that the value of units held, and any income derived from them, may fall as well as rise. Where a fund holds assets outside of the UK, fluctuations in exchange rates will affect the value of the investment.
This article should not be taken as advice or as a recommendation to invest in the Fund. The Fund is selected by MMM’s Investment Committee as a constituent of a series of risk-targeted portfolios. The Fund has particular characteristics that enable it to blend with other funds within the portfolios. Advice should be sought before investing in the Fund. The Fund will not be suitable for all investors, particularly if held in isolation.