While retaining a very positive longer-term view on sustainable investing, we expected 2021 to be a challenging year – as presaged by the performance of our sustainable funds during November 2020 as the ‘Covid-19 reopening’ trade played out.
However, as of early December, the funds have had a strong 2021, although this masks periods of strong out and underperformance, rather than a consistent trend.
There are several reasons for this, but in summary we tend to favour more growth-oriented sectors and stocks (such as technology, healthcare and high-end engineering); and the long-term prospects for those companies and industries badged as ‘growth’ have accelerated due to the pandemic. Conversely, many companies and sectors regarded as value (leisure, retail, oil, etc.) have seen their prospects worsen.
Past performance is not a reliable indicator of future results. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. Portfolio characteristics and holdings are subject to change without notice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.