Investment analysis: Responsible returns from global equities
Mithursha Kesavan studies the returns of SRI funds and finds the range of returns from responsible investors in the global equity asset class.
Across different asset classes, more than 660 vehicles in CAMRADATA Live are categorised as socially responsible investment (SRI) offerings.
The key asset classes are equity (71%), fixed income (17%), private markets (6%) and multi-asset (6%). Predominantly, the base currency of the vehicles is the US dollar (49%). The geographical focus of the vehicles is wide-ranging; global is the largest with 334 funds.
Global equity (USD) was the most common vehicle type with 111 funds. The performance for three months to December 31, 2021 ranged between 14.37% and -4.3%. This asset class also formed the top institutional investor research activity in January 2022 by both UK investors and European investors. These investors include investment consultants, pension funds and insurance firms.
CAMRADATA’S proprietary IQ tool shows the top-20 best-performing managers for an asset class. The best-performing manager in the global equity (USD) – SRI universe for the three years to December 2021 was Franklin Templeton Investments with its product FTIF – Franklin Technology Fund A (acc) USD. This vehicle achieved an excess return of 28.97% over the benchmark, whilst taking excess risk of 11.28% to achieve it.
In comparison, the best-performing manager for one year to December 2021 was Lombard Odier Investment Manager with its product LO Funds – Natural Capital (USD) I A. This vehicle achieved an excess return of 12.29% over the benchmark, whilst taking excess risk of 5.11% to achieve it.
The peer group report presented here displays the performance and risk taken in absolute and relative terms. In relative terms, for the three-year period to December 2021, 37 of these vehicles have performed above the benchmark return and all vehicles took more risk to achieve this in comparison to the benchmark.
The growing number of socially responsible investment funds across CAMRADATA Live demonstrates that many asset managers are increasingly involved with investing in companies that have positive social impacts, and it is highlighting that it is still possible to achieve strong returns while sticking to SRI values.
Mithursha Kesavan is an associate at CAMRADATA, the owner of Funds Europe.
*All figures are to 12 months to December 31, 2021 unless otherwise stated.