We asked Royal London Asset Management's George Crowdy what it was like to launch a fund during the crisis - and where sustainability is going now
The world is emerging in painful stages from the corona crisis - and starting to think about the shape recovery should take. For George Crowdy, that means 2020 is proving an extraordinary year in which to help launch RLAM's new global sustainable equity fund.
Crowdy says the crisis may eventually be seen as "hugely supportive of the transition to a more sustainable world," despite the scale of the human tragedy. That's partly because "well-governed companies are likely to prove better placed to navigate the economic storm," but mainly because, "investing in solutions to what the world really needs comes to the fore in times of crisis."
He thinks the S in ESG - the social side - is taking on a new prominence. "Sustainable brands are made through crises like this," says Crowdy, who co-manages the new fund with Mike Fox, RLAM's Head of Sustainable Investments. "People will want to purchase from, and work for, companies who show they really care about their employees and broader society at critical times."
That includes building new forms of corporate collaboration. "It's been amazing to hear of competitor companies coming together for the benefit of society, particularly in the technology sector, where firms are co-operating to develop COVID-19 contact tracing apps, and healthcare in relation to developing a vaccine," he says.
There are other potential gains. "We've all glimpsed what a low-carbon world might look like from an environmental perspective," Crowdy says, "and I think a more digital and connected world is here to stay, as is the need for resilient healthcare systems." This should play to the strengths of RLAM's new fund: "Our two biggest sector overweights are technology and healthcare," he says.
But just as the virus had no respect for national boundaries, Crowdy argues that sustainable investing must be similarly unconstrained. Many global sustainable equity funds are benchmarked against the MSCI World Index, a developed market index, he says, "but we thought it was more sensible and future-proof to use the MSCI All Countries World Index (ACWI) benchmark which includes emerging markets." It's an ongoing journey, "with about 5% of the fund invested in emerging markets, which we expect to go up towards 10%."
Distinctions are anyway blurring: some firms listed in developed markets now make half their sales in Africa and Asia, while some emerging market companies sell mostly to the US. "We just want to invest in the best sustainable ideas, regardless of where they're listed", he says.
Past performance is not a reliable indicator of future results. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author's own and do not constitute investment advice. For more information on the fund or the risks of investing, please refer to the fund factsheet, Prospectus or Key Investor Information Document (KIID), available via the relevant Fund Information page on www.rlam.co.uk.
All information is correct at May 2020 unless otherwise stated. Issued May 2020 by Royal London Asset Management Limited, Firm Reference Number: 141665, registered in England and Wales number 2244297; Royal London Unit Trust Managers Limited, Firm Registration Number: 144037, registered in England and Wales number 2372439; RLUM Limited, Firm Registration Number: 144032, registered in England and Wales number 2369965. All of these companies are authorised and regulated by the Financial Conduct Authority. Royal London Asset Management Bond Funds Plc, an umbrella company with segregated liability between sub-funds, authorised and regulated by the Central Bank of Ireland, registered in Ireland number 364259. Registered office: 70 Sir John Rogerson's Quay, Dublin 2, Ireland. All of these companies are subsidiaries of The Royal London Mutual Insurance Society Limited, registered in England and Wales number 99064. Registered Office: 55 Gracechurch Street, London EC3V 0RL. The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The Royal London Mutual Insurance Society Limited is on the Financial Services Register, registration number 117672. Registered in England and Wales number 99064. Telephone calls may be recorded. For more information please see our Privacy Notice at www.rlam.co.uk. AL RLAM P 0015