Money Observer Fund Awards 2019: Mixed Asset Lower Risk winner

And the winner of the Mixed Asset Lower Risk award is...

June 27, 2019

Fund Awards 2019: view full list of winners

BEST FUND

Royal London Sustainable Diversified

1-year return: 8.1%
3-year return: 32.2%

Royal London Sustainable Diversified is clear proof that sustainable investing benefits more than society – investors can profit too. It is our Best Mixed Asset Lower Risk award winner for 2019, after notching up sector-leading three-year performance.

A Rated Fund since 2017, it is a good option for investors looking for balanced exposure to equities and bonds via a sustainability focus; this approach has been employed in a disciplined manner over time and has led to highly consistent returns. Morningstar initiated coverage of the fund earlier this year with an analyst rating of bronze.

The strategy is managed by two experienced managers – Mike Fox on the equity side and Richard Nelson on the fixed income side. They have run the strategy since launch in 2009, making them two of the longest-tenured UK managers within the sustainable investment space.

Every holding in the £760 million fund has to meet key criteria. Fox’s investment approach is characterised by several features, including a focus on long-term themes and trends such as infrastructure and changing demographics. His core themes are the environment, human welfare and sustainability, and he prioritises companies leading their industries in environmental, social and governance (ESG) performance as assessed by Royal London’s analysts. He aims to integrate ESG considerations alongside financial analysis throughout the investment process.

HIGHLY COMMENDED FUND

Liontrust Sustainable Future Defensive Managed boasts among the best risk-adjusted returns in this sector, making it our runner-up for 2019. Typically, 45% of the fund is invested in global equities and 55% in bonds and cash.

Peter Michaelis and Simon Clements are the lead managers of Liontrust’s 10-strong sustainable investment team.

When seeking equity investments, they believe the companies that will thrive are those that improve people’s quality of life through medical, technological or educational advances, drive improvements in the efficiency with which we use increasingly scarce resources and help to build a more stable, resilient and prosperous economy.

In fixed income, the managers look for quality issuers, combining traditional credit analysis with a detailed sustainability assessment. The fund is well diversified across around 130 holdings.

Focus on long-term themes and trends bolster returns

A graph showing the performance of Fund Award 2019 winners (Mixed Risk Lower Risk)

 

Fund Awards 2019: view full list of winners

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