To combat climate change, reduce carbon emissions and transform to a low carbon economy, the world needs to invest $US4 trillion p.a.1
We invest in companies leading this transformation.
Access an area of structural growth:
Rebalance climate risk within other parts of your portfolio
Make an impact:
The Global Environment team has the specialist skill sets needed to invest in decarbonization, specifically: direct experience of managing decarbonization-focused strategies; and deep knowledge of the economic and investment implications of the energy transition.
The team draws on the expertise of the wider Thematic Equity team within Multi-Asset at Ninety One, who have a specialist knowledge of the supply/demand dynamics of metals and mining — including many of the key elements that go into renewable technologies. ESG factors are fully integrated into their investment process.
The Ninety One Global Environment Fund (the “Fund”) seeks capital growth and long-term income.
Principle Investment Strategies
Under normal circumstances, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in “environmental companies” (as defined below). This investment policy may be changed by the Fund upon 60 days' prior written notice to shareholders.
For purposes of the Fund's investment policy, the Adviser considers an environmental company to be one that (i) derives at least 50% of its revenue from activities deemed by the Adviser to contribute positively to environmental change; and (ii) is involved in the process of reducing carbon dioxide emissions (a company that offers “quantifiable carbon avoided”) (an “Environmental Company”). In order to determine whether a company contributes positively to environmental change, the Adviser may consider information reported by the company or third-party information or may apply its own methodology to assess a company’s positive contribution to the environment. Such Environmental Companies are involved in activities related to the process of sustainable decarbonization, which may include, but are not limited to, (i) renewable energy in such forms as solar, wind, clean power, and smart grids and networks; (ii) electrification through electric or autonomous vehicles, batteries, heating and cooling systems, air cleaners, and industrial electrification; and (iii) resource efficiency (including land and water) in industries including manufacturing, waste management, construction, agriculture, (including biological solutions), consumer products, and factories. The Adviser may identify other activities or sectors that it considers qualifying as environmental activities.
The Fund may invest in companies of any market capitalization and normally invests primarily in equity securities of mid- and large-capitalization U.S. and non-U.S. (including both developed and emerging market) companies. The equity securities in which the Fund invests are mainly common stocks, but may also include American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs” and, together with ADRs and EDRs, “Depositary Receipts”).
The Fund may invest a significant amount of its assets in a select geographic region or a particular country, such as the People’s Republic of China (“China”). The Fund may invest in A Shares of companies incorporated in China (“China A Shares”) that trade on the Shanghai Stock Exchange and the Shenzhen Stock Exchange through the Shanghai – Hong Kong and Shenzhen – Hong Kong Stock Connect programs (“Stock Connect”). Stock Connect is a mutual stock market access program designed to, among other things, enable foreign investments in China. The Fund may also invest in China through H Shares, which are shares of companies incorporated in China that are traded on the Hong Kong Stock Exchange. The Adviser has obtained Renminbi Qualified Foreign Institutional Investor (“RQFII”) status and has been granted the quota to invest in Chinese domestic securities, so it may also invest the Fund’s assets directly in Chinese domestic securities available only to foreign investors that have obtained status as an RQFII.
Under normal circumstances, the Fund invests in at least three countries, including the U.S., and invests at least 40% of its total assets in securities of non-U.S. companies. If conditions are not favorable, the Fund will invest at least 30% of its total assets in securities of non-U.S. companies. The Fund considers a company to be a non-U.S. company if: (i) at least 50% of the company’s assets are located outside of the U.S.; (ii) at least 50% of the company’s revenue is generated outside of the U.S.; (iii) the company is organized or maintains its principal place of business outside of the U.S.; or (iv) the company’s securities are traded principally outside of the U.S.
The Fund has a fundamental policy to concentrate its investments in “climate change-related industries.” The Fund considers “climate change-related industries” to include renewable energy, electrification and resource efficiency and any of their sub-industries, such as, but not limited to, solar energy, electric vehicles or waste management and businesses that service such industries.
The Fund seeks to achieve its investment objective through an integrated investment approach. The Fund may select investments pursuant to the Adviser’s proprietary screening process and its fundamental research process, and may also include information provided by third-party rating organizations. The Adviser’s fundamental research process assesses companies both relative to their peers and based on their own attributes. In identifying companies to be included in the Fund’s investable universe, the Adviser seeks to create an investment portfolio that accurately reflects the opportunities available for the Fund. The Adviser undertakes a bottom-up investment process involving research into companies exhibiting (i) structural growth opportunities by reviewing both short- and long-term revenue; (ii) sustainable or persistent returns; and (iii) competitive advantages relative to their peers both through (a) company factors, including technology, branding, and investments in research and development, and (b) market factors, such as pricing power, barriers to entry and consumer behaviors and preferences with respect to environmental issues. The Adviser uses this research, as well as a company’s balance sheet and discussion with management to determine a company’s suitability for inclusion in the Fund's investable universe.
The Adviser integrates proprietary environmental, social and governance (“ESG”) factors into the Fund’s investment process, which include the (i) inclusion of Environmental Companies with the exclusion of those with revenues from oil, gas and coal that exceed 5%; (ii) use of both quantitative and qualitative assessment of ESG risks through proprietary scores and underlying research; and (iii) monitoring of ESG considerations as part of the review of company management. The Fund may not invest in a company if the Adviser determines that the company has any material social and/or governance risks, even if the company otherwise meets the Adviser’s environment and decarbonatization criteria. In addition, any deterioration in the ESG assessment of a held company will be factored into any decision to sell such security.
The Fund is classified as “non-diversified,” which means that it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund.