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Fundsmith launches sustainable equity fund for institutional investors

Terry Smith

Fundsmith has rolled out a sustainable equity fund for institutional investors.

The firm has managed a sustainable equity segregated mandate for Comic Relief for the past three years, which forms the basis for the new fund.

Since inception, the Comic Relief portfolio has compounded in value by 23.9 per cent per annum, in line with the popular Fundsmith Equity fund.

The Fundsmith Sustainable Equity fund will follow a similar strategy to the existing Equity fund, but will avoid investing in: aerospace and defence; brewers, casinos, gas and electric utilities, metals and mining, oil and gas, pornography and tobacco. The fund will also screen for how companies manage ESG policies and their investment in product innovation.

Fundsmith’s chief executive Terry Smith and other members of the team will invest over £10m in the Sustainable Equity fund, which launched today.

Smith says: “We have long felt that many investors who apply the commonly used factors to identify sustainable investments do so at the expense of the long-term economic sustainability of a business.

“By marrying important sector exclusions with the proven sustainable investment process of Fundsmith we have shown that we can deliver superior investment performance. I believe the Fundsmith Sustainable Equity fund will provide a product that institutional investors both need and want.”

Minimum investment is £5m with an annual management fee of 0.9 per cent and an estimated ongoing charges figure of 1.01 per cent.

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