Triodos Sustainable Equity Fund

In Germany, Forum Nachhaltige Geldanlagen awarded Triodos Sustainable Equity Fund with three stars, the highest sustainability rating.

Investment policy

In the consumer-related sectors share price performances were mixed. Media stocks were the strongest performers, partly owing to a takeover bid for Time Warner. Automotive suppliers and brand names such as Nike, Starbucks and Hennes & Mauritz staged disappointing performances. The position in Chipotle Mexican Grill was sold after the company was removed from the Universe. In the Consumer Staples sector the takeover bid for WhiteWave Foods had a positive impact on the investment result.

Stocks in the Healthcare sector underperformed the market. The share price performance of pharmaceuticals company Novo Nordisk was particularly disappointing. Stronger performers included medical technology companies such as Edwards Lifesciences and Baxter. The sub-fund exchanged its holding in Express Scripts for Becton, Dickinson and Company.

Solar cell manufacturers disappointed. Their share prices fell sharply due to the overcapacity in the solar market and the resulting pressure on margins. The outcome of the US presidential election and the bankruptcy of SunEdison reinforced the negative sentiment. The sub-fund reduced its position in this area by selling SolarCity and SunPower.

In the Industrials sector attractive share price rises were noted for more cyclical companies, including Xylem, Waste Management and Canadian National Railway. The share price of Stericyle fell following the publication of disappointing results by the company. Information technology stocks outperformed the market. In view of a disappointing outlook, the holding in Seagate Technology was sold; the proceeds were reinvested in Cisco Systems.

At the end of the year the modest rise in interest rates led to a sharp recovery for stocks in the Financial Services sector, which represent a substantially underweight position in the sub-fund due to the sustainability criteria that are applied. In contrast to the performance of real estate stocks in general, the share price performance of specifically UK real estate stocks disappointed. This was mainly due to the negative effect of the Brexit vote on UK property funds focusing on the non-domestic market and to the depreciation of sterling.

Top 10 holdings as at December 31, 2016

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Name

Country

Sector

% of net assets

 

 

 

 

Comcast

United States

Consumer Discretionary

3.1

Time Warner

United States

Consumer Discretionary

2.8

Roche

Switzerland

Healthcare

2.7

Priceline.com

United States

Consumer Discretionary

2.6

Walt Disney

United States

Consumer Discretionary

2.5

Taiwan Semiconductor

Taiwan

Information Technology

2.1

Cisco Systems

United States

Information Technology

2.1

Svenska Handelsbanken

Sweden

Financials

1.9

Adobe

United States

Information Technology

1.9

ING

Netherlands

Financials

1.8

 

 

Performance

In 2016, the total net assets of Triodos Sustainable Equity Fund declined from EUR 534.2 million to EUR 525.6 million. During this period, the sub-fund (R-Dis) realised a negative return of -3.2% (including reinvestment of dividends), while the benchmark rose 10.7%.

Equities in the Energy and Financial Services sectors rose sharply following the US presidential election. Because of its focus on sustainability, the sub-fund has below-average positions in these sectors, which caused its performance to lag behind that of the MSCI World Index. Share price falls for solar cell manufacturers also contributed to the underperformance. The overweight position in Cyclical Consumer Goods, especially the Automobiles sub-sector, also had a negative impact. The same was true for the Telecom and Real Estate sectors, which was mainly attributable to share price falls and currency losses on specifically UK stocks following the Brexit vote.

Figures show that over the long term sustainable investing outperforms worldwide stock exchange markets. As a result the sub-fund foresees the disappointing results over 2016 to be levelled out in the coming years. The sub-fund firmly believes that renewable energy is in the long term the solution to solve energy problems and thus not invest in fossil fuels. The sub-fund’s positioning continues to emphasise companies that operate in sectors that offer autonomous long-term growth. These growth characteristics are found especially in the sectors Information Technology, Consumer Discretionary and Healthcare.

Performance based on net asset value as at December 31, 2016
(including reinvestment of dividends, including costs)

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Morningstar
rating

1 year

3 year p.a.

5 year p.a.

10 year p.a.

Since inception p.a.1

 

 

 

 

 

 

 

 

1

The inception dates can differ between share classes.

2

The Z-share class and the I-share class have a limited history. Returns prior to the launch of these share classes are based on the returns of the comparable R-share class.

3

These are the historical figures of the former Triodos Meerwaardefonds NV, which merged into Triodos SICAV I on June 28, 2010.

4

Excluding costs.

 

n/a: not applicable

Triodos Sustainable Equity Fund I-Cap

★ ★ ★

-2.6%

9.9%

13.5%

n/a

4.2%

Triodos Sustainable Equity Fund I-Dis

n/a

-2.6%

9.8%2

13.2%2

4.6%2

3.3%2

Triodos Sustainable Equity Fund R-Cap

★ ★ ★

-3.2%

9.3%

12.9%

n/a

3.7%

Triodos Sustainable Equity Fund R-Dis

★ ★ ★

-3.2%

9.2%

12.9%

4.4%3

3.1%3

Triodos Sustainable Equity Fund KR-Cap

★ ★ ★

12.7%

10.7%

n/a

n/a

12.1%

Triodos Sustainable Equity Fund KR-Dis

★ ★ ★

12.7%

10.7%

n/a

n/a

12.1%

Triodos Sustainable Equity Fund Z-Cap

★ ★ ★

-2.6%

9.8%

13.4%2

n/a

4.0%2

Triodos Sustainable Equity Fund Z-Dis

★ ★ ★

-2.6%

9.9%

13.3%2

4.6%2

3.3%2

Benchmark: MSCI World Index (in euros)4

n/a

10.7%

13.4%

15.0%

6.2%

2.8%

 

 

 

 

 

 

 

Evolution of returns Triodos Sustainable Equity Fund

Evolution of returns Triodos Sustainable Equity Fund (line chart)

* Figures given for the R-share classes are the historical returns of Triodos Meerwaardefonds NV, which merged into Triodos SICAV I on June 28, 2010.

** Triodos Sustainable Equity Fund aims to achieve returns that are in line with the market. The sub-fund compares its return and the sustainability scores (environment, social and governance) of the companies that it invests in with the MSCI World Index (in euros) as a benchmark for (non-sustainable) global equity funds. This is a generally accepted index for worldwide diversified equity funds. The investment policy that is pursued by Triodos Sustainable Equity Fund is not aimed at replicating or outperforming the benchmark in the short term. The sub-fund may deviate from the benchmark because it only invests in companies that meet its strict sustainability criteria. The fund believes that in the longer term sustainable investments offer more stable and higher returns than non-sustainable investments. The fund therefore tends to invest in companies on the basis of a long-term investment horizon.

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