Triodos Sustainable Equity Fund

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

Investment policy

2017 was a good year for equity investors. Due to a globally synchronised economic recovery, most companies in the sub-fund’s portfolio delivered a strong stock price performance. The sub-fund’s ongoing focus on blue chip companies in areas that benefit from long-term growth trends, such as Information Technology and Healthcare, paid off.

Information Technology was the strongest performing sector worldwide. Investments in technology stocks, especially software companies, enjoyed a considerable price appreciation. Consequently, Adobe Systems and Red Hat were among the strongest performers within the portfolio. The share price performance of PayPal benefited substantially from the growth of online payments. The sub-fund established a position in German ERP-software company SAP.

Cyclical Consumer stocks underperformed the market. Media stocks suffered from a decline of advertising volumes and growing digital competition. Many retail companies are still facing a tough competitive environment. The outlook for this sector continues to be impacted by increased competition of online retail propositions. The sub-fund reduced its position in this sector by selling its holdings in H&M and VF Corp. This was only partly offset by the favourable share price performances of automotive suppliers. Automobile component suppliers are still benefitting of the increased value-added content per car due to increased safety standards, growing popularity of automatic driving support systems and electrification of vehicles.

Companies focusing on renewable energy registered mixed share price performances. The performance of Vestas, for instance, disappointed due to the (worldwide) changeover from subsidised growth to awarding projects via auction systems, which caused pressure on turbine prices and margins. The share price of First Solar, on the other hand, went up sharply. This solar cell manufacturer benefited from improved investor sentiment due to price stability. The share price of Acuity Brands fell following the publication of disappointing earnings. Green utility company EDP Renovaveis received a takeover bid, after which the sub-fund sold its shares in the company.

In the Healthcare sector the strong equity selection for medical technology stocks (in particular) resulted in an above-average share price appreciation. Notably strong performers included PerkinElmer, Baxter and Becton, Dickinson & Company. The share prices of US healthcare insurers Aetna and Anthem also rose sharply. In the pharmaceuticals sector, Novo Nordisk clearly outperformed the rest of the sector. Disappointing sales and earnings trends resulted in a share price fall for orthopaedic devices supplier Zimmer Biomet.

In the Industrials sector, the more cyclical stocks, including Xylem (water infrastructure) and Kubota (agricultural equipment) were taking the lead. The sub-fund sold its holdings in Brambles -in view of the company’s disappointing performance- and Stericycle as the company was no longer part of the investment universe. The proceeds were reinvested in Rockwell Automation, a market leader in industrial automation and information systems.

Financial stocks within the portfolio underperformed, especially due to the disappointing performance of Svenska Handelsbanken. The portfolio continues to have a relatively small weight in the financial sector. Telecom and real estate stocks also generally posted modest performances. The position in British Land, from the UK, was sold because of the increased economic and currency-related risks.

Top 10 holdings as at December 31, 2017

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Name

Country

Sector

% of net assets

 

 

 

 

Cisco Systems

United States

Information Technology

2.7

Priceline.com

United States

Consumer Discretionary

2.7

Roche

Switzerland

Healthcare

2.4

Taiwan Semiconductor

Taiwan

Information Technology

2.3

Adobe Systems

United States

Information Technology

2.2

Time Warner

United States

Consumer Discretionary

2.2

PayPal

United States

Information Technology

2.1

ING Bank

Netherlands

Financials

2.1

Walt Disney

United States

Consumer Discretionary

2.1

Anthem

United States

Healthcare

2.0

 

 

 

 

Performance

Based on net asset value, the sub-fund generated a return of 9.4% in 2017 (Z-dis). During the same period, the MSCI World index rose 7.1%. The sub-fund’s total net assets rose from EUR 525.6 million to EUR 598.6 million in 2017.

The outperformance was mainly due to the overweight position in the Information Technology sector and the absence of traditional energy stocks in the portfolio. The equity selection in the Healthcare and Information Technology sectors also had a positive impact. The stock selection in the Cyclical Consumer Goods sector had a negative impact, particularly due to the overweight position in media stocks.

Performance based on net asset value as at December 31, 2017
(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

★ ★

9.4%

7.4%

12.4%

5.0%

4.7%

Triodos Sustainable Equity Fund I-Dis

★ ★

9.5%

7.4%2

12.2%2

4.9%2

3.6%2

Triodos Sustainable Equity Fund R-Cap

★ ★ ★

8.8%

6.8%

11.7%

4.5%

4.2%

Triodos Sustainable Equity Fund R-Dis

★ ★ ★

8.8%

6.8%

11.7%

4.6%3

3.5%3

Triodos Sustainable Equity Fund KR-Cap

★ ★

13.7%

12.3%

n/a

n/a

12.4%

Triodos Sustainable Equity Fund KR-Dis

★ ★

13.7%

12.3%

n/a

n/a

12.4%

Triodos Sustainable Equity Fund Z-Cap

★ ★ ★

9.4%

7.4%

12.4%

4.8%

4.5%2

Triodos Sustainable Equity Fund Z-Dis

★ ★ ★

9.4%

7.4%

12.3%2

4.9%2

3.6%2

Benchmark: MSCI World Index (in euros)4

n/a

7.1%

9.3%

13.6%

7.0%

3.1%

 

 

 

 

 

 

 

 

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. 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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