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EdenTree Responsible & Sustainable UK Equity
The EdenTree Responsible and Sustainable range of funds make social responsibility key to any investment decision. In the EdenTree Responsible & Sustainable UK Equity fund, long-running manager Sue Round curates an actively-managed, diverse selection of UK businesses, designed to generate long-term returns for ethically-minded investors.
Previously EdenTree Amity UK
Our opinion
As pioneers of responsible investing, EdenTree offers even the most discerning client a justifiable investment opportunity. Although it can invest in companies of any size, EdenTree Responsible & Sustainable UK Equity is very different from many of its peers as it invests in a large proportion of smaller and medium-sized companies. Sue has proven over several decades that ethical investing and good returns can go hand in hand.
Company description
EdenTree Investment Management was the product of a rebranding, in June 2015, by Ecclesiastical Investment Management, who first launched its investment management arm in 1988. The rebranding was done to emphasise its socially responsible focus and the company is a leader in environmental, social and corporate governance investing. It also runs money for many charities. The group was awarded the Elite Equities Provider rating in 2016.
Fund manager
Sue is one of the country’s longest-running ethical managers, with more than 30 years’ experience. Having joined the company in 1984, she has managed the EdenTree Responsible & Sustainable UK Equity fund since 1988. She is joined by Ketan Patel, who started at EdenTree as a research analyst in 2003 and became co-manager of this fund in September 2016. He previously worked on the trading desk at JP Morgan and as a healthcare analyst at Insight Investment.
EdenTree Responsible & Sustainable UK Equity is the longest-established ethical fund in the UK and I'm proud to have been at the helm for around 30 years.
Sue RoundFund manager
Investment process
Sue, through her stock-picking technique, finds companies that are currently undervalued and out-of-favour, but with the potential to increase in value. Responsible investing is a key factor in decision making, with any potential investment having to pass through a rigorous multi-factor screening process. The fund consists of around 130 stocks, with a considerable weighting in small to medium-sized companies.
ESG
ESG - Explicit
EdenTree places all ESG considerations at the forefront of its investment process. All investment ideas must meet the criteria laid out by the screening model before being considered for inclusion in a fund. There are three parts to this: ethics/values, responsibility/ESG and sustainability/thematic. The nine exclusion criteria which make up the ethics/values aim to avoid activities that are harmful to society. Companies that derive more than 10% of their profits or turnover from these activities are excluded from the universe of investible stocks. EdenTree then assesses six areas of business risk (responsibility/ ESG), which are core to the way in which a stock is considered as being suitable for inclusion. Finally, EdenTree will look at companies from a sustainability/ thematic angle. As it screens stock ideas, the team considers the positive sustainability case in terms of products and solutions. Great importance is always placed on engagement with the management teams of the companies the managers invest in - engagement which is undertaken by a dedicated in-house team. EdenTree does not invest in any stock involved in a controversial industry or practice.
Risk
The small and mid-cap tilt makes the fund's risk profile higher than its peer group and the UK stock market. This is somewhat mitigated by the large number of stocks held, which increases diversification. The ethical mandate means the fund may lag the market when stocks it does not invest in - oil & gas majors for example - are driving the market upwards.
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