Worldwide Sustainability
An unconstrained investment strategy that invests in companies across the world which are positioned to contribute to, and benefit from, sustainable development.
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Our Worldwide Sustainability strategy was launched in November 2012. It is an unconstrained investment strategy, by which we mean it is not restricted to certain countries, and is able to invest in between 40-60 companies all over the world. As with all of our strategies, we are interested in finding only the very best businesses; those with high quality management teams, franchises, and financials, that are well positioned to contribute to, and benefit from, sustainable development.
Strategy highlights: a focus on quality and sustainability
- Companies must contribute to sustainable development and make a net-positive impact to a more sustainable future. Portfolio Explorer >
- We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >
- We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >
- Our approach is long-term, bottom-up, high conviction and benchmark agnostic
- We focus on capital preservation as well as capital growth – we define risk as the permanent loss of client capital
Latest insights
Strategy update: Q1 2023
Worldwide Sustainability strategy update: 1 January - 31 March 2023
Another eye-opening quarter goes by in Financeland and we are again forced to contend with all kinds of governance, financial and economic failures which serve to highlight the perilous condition of the global economy and its capital markets.
From our position, we continue to see the world through the bottom-up lenses of our high-quality investee companies which inspire feelings of optimism and excitement. This is a jarring juxtaposition to news headlines which can drive despondency and paralysis.
A year ago, we were digesting the invasion of Ukraine and a boom in hydrocarbon fuels, alongside questions over the future of sustainable investing. This year, we are looking at bank runs and governance failures and the denouement of long-term issues stemming from moral hazard and adverse selection. Our goal remains, as ever, to stay focused on high-quality management teams running sustainable and necessary franchises, driving human development forward with strong financials to allow these companies to weather any coming storms.
To that end, we took several steps this quarter to improve the quality of the strategy. In terms of new positions, we re-invested in Edwards Lifesciences (United States: Health Care) which is a high-quality cardiac valve supplier that we owned previously. The valuation had fallen significantly since we divested and we believe Edwards’ shares again offer good, long-term returns. We also took a position in Advanced Drainage Systems (United States: Industrials), a water management company whose shares have nearly halved from last year on concerns over weaknesses in the residential market and where we feel we have a reasonable entry point to a strong franchise. We have also added to some of our favourite companies where share prices have presented opportunities. These include companies such as Halma (United Kingdom: Information Technology), Spectris (United Kingdom: Information Technology), Infineon Technologies (Germany: Information Technology), Admiral Group (United Kingdom: Financials) and Nordson (United States: Industrials), among others.
In terms of divestments, we sold out of Tomra (Norway: Industrials), a supplier of sorting and reverse vending machines and technology, and a long-term holding from the inception of the strategy. Increasingly, we became concerned about Tomra’s margins, competition and outlook versus its valuation. We have also sold our position in Rational (Germany: Industrials) as the valuation crept back up amidst concerns over the outlook for commercial kitchens. We trimmed position sizes in Tecan (Switzerland: Health Care), WEG (Brazil: Industrials), Arista Networks (United States: Information Technology) and Alfen (Netherlands: Industrials), among others. The overriding reasons being valuations creeping up.
While we don’t make macro predictions, it is hard to escape the feeling that current headlines sound ominously familiar to those of a decade and a half ago. From our perspective, we continue to meet with, analyse and invest in high-quality sustainability franchises, run by competent and honest people, and with strong financials, as we believe this is the best way to protect and grow our clients’ capital over the long term.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 1%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
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Strategy update: Q4 2022
Worldwide Sustainability strategy update: 1 October - 31 December 2022
2022 was a challenging year for several reasons. Geopolitical and macro-economic uncertainty increased. The war in Ukraine caused an energy crisis and exacerbated a cost of living crisis in Europe. Rising inflation and interest rates triggered fears of a recession in many economies around the world.
During the year we focused on enhancing the resilience and diversification of the strategy. We were pleased to introduce two high-quality consumer staples companies, Jerónimo Martins (Portugal) and Beiersdorf (Germany) into the strategy, along with two financial companies, Markel (United States) and Admiral Group (United Kingdom), one telecommunications company, Elisa (Finland), one healthcare company, Roche (Switzerland) and one industrial company, Watsco (United States).
We disposed of four healthcare companies: Edwards Lifesciences (United States), Philips (Netherlands), Masimo (United States) and Illumina (United States); one information technology company, Ansys (United States); and one consumer company, Ain Holdings (Japan).
In the fourth quarter, we did not initiate any new positions or dispose of any companies. However, we took the opportunity to build up some of our newer positions in Jerónimo Martins, Beiersdorf, Markel, Elisa and Roche. We also added to many of our resilient franchises, including HDFC (India: Financials), Hoya (Japan: Health Care), MonotaRO (Japan: Industrials), Kotak Mahindra Bank (India: Financials) and Fortinet (United States: Information Technology).
We increased positions in a number of companies that became more reasonably valued towards the end of the year, including Adyen (Netherlands: Information Technology), Halma (United Kingdom: Industrials), Chr. Hansen (Denmark: Materials), A. O. Smith (United States: Industrials) and Zebra Technologies (United States: Information Technology).
At the same time, we trimmed higher-valued and somewhat cyclical positions in WEG (Brazil: Industrials), Diploma (United Kingdom: Industrials), Alfen (Netherlands: Industrials), Constellation Software (Canada: Information Technology), Arista Networks (United States: Industrials) and Jack Henry & Associates (United States: Information Technology). We also trimmed Tecan (Switzerland: Health Care), in part due to valuation, but also due to caution about our overall diagnostics exposure.
We look forward to the year ahead with cautious optimism. We are beginning to see some exciting long-term opportunities to invest in many of our favourite companies at more reasonable valuations. However, we remain conscious of the risks that still dominate the economic picture. Our focus in the months ahead will be on portfolio resilience and diversification.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 1%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q3 2022
Worldwide Sustainability strategy update: 1 July - 30 September 2022
Generally speaking, over the past quarter, a few high-level points are becoming clear. It seems that macro-economic and company-specific data and commentary continues to raise alarm bells and that the volume of geopolitical noise rises unabated. A final observation is that financial fundamentals are not yet being rewarded by the market which continues to focus on oil and gas: the only sector to post positive returns so far this year.
In terms of how we are responding to this challenging investment backdrop, we have initiated two new positions in familiar companies. Roche (Switzerland: Health Care) is a high-quality and well-stewarded pharmaceutical and diagnostic company at attractive valuations and Markel (United States: Financials) is a high-quality insurance company which is also reasonably valued. Both should provide fundamental support in the portfolio via strong financials and robust franchises.
We have also added to other resilient franchises such as the well-run Finnish telco Elisa (Finland: Communication Services), retailer Jerónimo Martins (Portugal: Consumer Staples), home and personal care supplier Beiersdorf (Germany: Consumer Staples) and a strong Asian consumer company, Unicharm (Japan: Consumer Staples), among others.
At the same time, we have trimmed higher-valued and somewhat cyclical positions in Nemetschek (Germany: Information Technology), Veeva Systems (United States: Health Care), Tomra (Norway: Industrials), Synopsys (United States: Information Technology), MonotaRO (Japan: Industrials), Nordson (United States: Industrials) and Alfen (Netherlands: Industrials), among others.
We have not divested any holdings this quarter and we believe the aforementioned changes leave the portfolio in a more robust position.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 1%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q2 2022
Worldwide Sustainability strategy update: 1 April - 30 June 2022
Stock markets during 2022 have reminded us that the value of equities can rise and fall sharply, hence the importance of investing in the asset class for the long term rather than the short term.
We continue to deploy the same investment philosophy and process as we navigate these markets, and continue to build resilience in the portfolio. The chart below perhaps best illustrates what we have been trying to navigate. It shows the performance of the global investment benchmark (MSCI AC World Index), broken down by sector, for the year to the end of June. It highlights that without investing in energy or utilities (most of which are fossil fuel-based) it has been incredibly difficult to generate decent returns from equities.
Little has changed for us from Q1 to Q2. Most of our companies continue to perform well but the price investors are willing to pay for them has fallen. We have taken some profits from some of our companies that appear to be defying gravity, and removed some where we have quality concerns. We sold Ain Holdings (Japan) after nine years in the strategy. We have long admired the company for its defensive attributes, but we believe it will come under pressure as drug rebates in Japan continue to fall. We exited Philips (Netherlands) – a clear mistake – having joined the journey two years ago. The company’s efforts to build a world-class patient treatment and monitoring business have been plagued by product recalls and supply chain difficulties.
We sold Ansys (United States) on growing concerns about management incentives; Illumina (United States) due to concerns about the likely negative impact of a legally contested acquisition as well as a patent litigation case; and Masimo (United States) following a confusing acquisition that takes the company into an unrelated industry and threatens to weaken the franchise quality.
We have also added some new names to provide resilience. We bought pharmaceutical and laboratory equipment supplier Sartorius (Germany), and HVAC distribution business Watsco (United States). After two years on the sidelines, we invested once more in consumer company Beiersdorf (Germany) and telecommunications company Elisa (Finland). We also initiated, and are still building positions in, a leading UK-listed auto and household insurance company, as well as a Portuguese-listed retailer that earns most of its revenues and profits in Poland, and which we consider one of the highest-quality, most responsible operators of good-value supermarkets anywhere in the world. All the aforementioned transactions resulted in higher portfolio cash levels at the end of the quarter.
The war in Ukraine, high inflation, low real-wage growth, rising interest rates, and declining growth and corporate-earnings expectations have produced a widespread sell-off. In this environment, the market has yet to show much concern for corporate debt and rising debt-servicing requirements. We continue to invest in companies we believe are high quality and have defensive attributes, not least illustrated by high-quality financials and solid balance sheets.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 1%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Proxy voting: Q1 2023
Worldwide Sustainability proxy voting: 1 January - 31 March 2023
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter, there were 86 resolutions from six companies to vote on. On behalf of clients, we voted against six resolutions.
We voted against the appointment of the auditor at Infineon Technologies and Nordson as they have been in place for over 10 years and the companies' have given no information on intended rotation. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts and follows best practice. (two resolutions)
We voted against Nordson’s remuneration proposal, as we have done at the previous three annual general meetings. Our preference is for schemes that are reasonable and simple, and while we do not disagree with any of the chosen metrics in their own right, we think five separate performance metrics split across various payment methods is overly complex. We also voted against the company’s request to eliminate the requirement for supermajority support for proposals, such as mergers and takeovers, as we believe the supermajority condition makes it more difficult for would-be acquirers with short-term agendas to enact a takeover. (four resolutions)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q4 2022
Worldwide Sustainability proxy voting: 1 October - 31 December 2022
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 56 resolutions from nine companies to vote on. On behalf of clients, we voted against four resolutions.
We voted against the approval of CSL's remuneration report and the equity-based remuneration of the CEO. We believe their remuneration focuses on the shorter term rather than the longer term, and the absolute level of CEO pay, and the gap between median pay, is excessive. (two resolutions)
We voted against the appointment of the auditor at Chr. Hansen and Coloplast, as they have been in place for over 10 years and the companies have given no information on intended rotation. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts, and follows best practice. (two resolutions)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q3 2022
Worldwide Sustainability proxy voting: 1 July - 30 September 2022
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 79 resolutions from six companies to vote on. On behalf of clients, we voted against one resolution.
We voted against the election of the chairman of the audit committee at Vitasoy as the committee met less than four times during the last fiscal year. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q2 2022
Worldwide Sustainability proxy voting: 1 April - 30 June 2022
During the quarter, there were 477 resolutions from 32 companies to vote on. On behalf of clients, we voted against 28 and abstained on four resolutions.
We voted against Ansys’ executive remuneration, as we believe it is subject to adjustments to facilitate payments to management. We voted against the appointment of the auditor, as they have been in place for over 10 years and the company has given no information on intended rotation. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts, and following best practice. (two resolutions)
We voted against the appointment of the auditor at Arista Networks, Cognex, Constellation Software, Fortinet and Masimo, as per our comments on auditor rotation above. (five resolutions)
We voted against Atlas Copco’s remuneration report as no progress appears to have been made to address shareholder concerns, the CEO's total remuneration exceeds that of peers and there is no disclosure on short-term incentive plan (STIP) targets. (one resolution)
We voted against Illumina’s executive remuneration as they have changed the goalposts of their long-term incentive plan in light of COVID-19. We voted against the appointment of the auditor, as per our comments on auditor rotation above. (two resolutions)
We voted against Philips’ remuneration report as we believe it is unnecessarily complex and is subject to repeated adjustments to facilitate payments to management. (one resolution)
We voted against Natura's request to adopt cumulative voting and to recast votes for an amended slate of directors. We do not believe these requests are in shareholders’ interests. Unfortunately, due to an operational voting error, we abstained from voting on the company’s remuneration policy and the election of a candidate to the supervisory council. We had intended to vote for the remuneration policy, but had flagged areas to follow up with the company on. Our voting intention was to abstain from voting on the establishment of a supervisory council and a separate election for board members. This error did not have a material impact on the results of the meeting. (two resolutions against, two resolutions abstained)
We voted against amendments to Synopsys’ equity incentive plan due to uncertainties with greater stock-based compensation grants. We voted against the appointment of the auditor, as per our comments on auditor rotation above. (two resolutions)
We voted against Texas Instruments’ executive remuneration, as we believe the absolute pay-outs for the CEO are high compared to other executive directors and the median employee. We voted against the appointment of the auditor, as per our comments on auditor rotation above. (two resolutions)
We voted against amendments to Veeva System’s equity incentive plan which would have given authority to the administrator to reprice options without shareholder approval. We voted against the appointment of the auditor, as per our comments on auditor rotation above. (two resolutions)
We voted against WEG’s request to adopt cumulative voting and to recast votes for the amended board and supervisory council slate. We do not believe these requests are in shareholders' interests. We abstained from voting for a minority candidate as we prefer to support the board. (three resolutions against, two resolutions abstained)
We voted against Zebra Technologies’ execution remuneration, as we believe the CEO's total remuneration is high compared to the median employee, and exceeds that of peers. We voted against the appointment of the auditor, as per our comments on auditor rotation above. (two resolutions)
We supported a shareholder proposal relating to Constellation Software which requested the company prepare a report on its plans to identify, address, mitigate and dismantle racial disparities within its workforce. (one resolution)
We supported a shareholder proposal relating to Fortinet which requested the company eliminate its supermajority vote provisions. Supermajority vote requirements can impede shareholders’ abilities to vote on resolutions that are in their interests. (one resolution)
We supported shareholder proposals relating to Illumina and Texas Instruments which would enable shareholders with a combined 10% share ownership the right to call a special shareholder meeting. (two resolutions)
We voted against a shareholder proposal relating to Ansys where shareholders were seeking to declassify the board. We believe a classified board offers some protection against hostile takeovers. (one resolution)
We voted against a shareholder proposal relating to Synopsys which would have enabled shareholders to take action with written consent on important issues that arise between annual meetings. We consider ourselves active shareholders and voting an important responsibility in our investment management duties. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
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For illustrative purposes only. Reference to the names of example company names mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies. Companies mentioned herein may or may not form part of the holdings of Stewart Investors. Holdings are subject to change.
Certain statements, estimates, and projections in this document may be forward-looking statements. These forward-looking statements are based upon Stewart Investors’ current assumptions and beliefs, in light of currently available information, but involve known and unknown risks and uncertainties. Actual actions or results may differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements. There is no certainty that current conditions will last, and Stewart Investors undertakes no obligation to correct, revise or update information herein, whether as a result of new information, future events or otherwise.
Source: Stewart Investors investment team and company data. Securities mentioned are all holdings which have/have had a portfolio weight over 0.5% from representative Asia Pacific Sustainability Strategy, Asia Pacific & Japan Sustainability Strategy, Asia Pacific Leaders Sustainability Strategy, European Sustainability Strategy, European (ex UK) Sustainability Strategy, Global Emerging Markets Leaders Sustainability Strategy, Global Emerging Markets Sustainability Strategy, Indian Subcontinent Sustainability Strategy, Worldwide Sustainability Strategy and Worldwide Leaders Sustainability Strategy accounts up to 31 March 2023.
The Stewart Investors supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.
Source for Climate Solutions and impact figures: © 2014–2023 Project Drawdown (drawdown.org). Source for Human Development Pillars: Stewart Investors investment team.
Source for climate solutions and human development analysis and mapping: Stewart Investors investment team. Contributions are defined by the team as demonstrable contributions to any solution, either direct (directly attributable to products, services or practices provided by that company), or enabling (supported or made possible by products or technologies provided by that company).
Investment terms
View our list of investment terms to help you understand the terminology within this document.
Fund data and information
Fund prices and details
Click on the links below to access key facts, literature, performance and portfolio information for the funds and share classes available in this jurisdiction:
Stewart Investors Worldwide Sustainability Fund
| Fund name | Fund type | Currency | Price | Daily change | Price date | Factsheet |
|---|---|---|---|---|---|---|
| Stewart Investors Worldwide Sustainability Class III (Acc) | Irish UCITs | CAD | 9.90 | 0.15 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class I (Acc) | Irish UCITs | EUR | 12.82 | 0.27 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class VI (Acc) | Irish UCITs | EUR | 2.69 | 0.27 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class VI (Dist) | Irish UCITs | EUR | 12.62 | 0.27 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class VI (Acc) | Irish UCITs | GBP | 12.38 | -0.25 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class VI (Acc) | Irish UCITs | USD | 9.36 | 0.29 | 30 May 2023 | |
| Stewart Investors Worldwide Sustainability Class VI (Dist) | Irish UCITs | USD | 9.32 | 0.29 | 30 May 2023 |
Share prices are calculated on a forward pricing basis which means that the price at which you buy or sell will be calculated at the next valuation point after the transaction is placed. Where a fund price is marked XD, this means that the fund is currently Ex-Dividend. Past performance is not necessarily a guide to future performance. The value of shares and income from them may go down as well as up and is not guaranteed. Please note that the yield quoted above is not the historic yield. It is considered that the yield quoted represents the current position of investments, income and expenses in the fund and that this is a more accurate figure. Investors may be subject to tax on their distribution. The yield is not guaranteed or representative of future yields. You should be aware that any currency movements could affect the value of your investment. The Funds within the First Sentier Investors Global Umbrella Fund plc (Irish VCC) are denominated in USD or EUR.
Following the UK departure from the European Union, the First Sentier Investors ICVC, an open ended investment company registered in England and Wales ("OEIC") has ceased to qualify as a UCITS scheme and is instead an Alternative Investment Fund ("AIF") for European Union purposes under the terms of the Alternative Investment Fund Managers Directive (2011/61/EU). Accordingly, no marketing activities relating to the OEIC are being carried out by Stewart Investors in the European Union (or the additional EEA states) and the OEIC is not available for distribution in those jurisdictions. We have made documents available for existing EU investors in the ICVC which can be accessed here.
