ESG Fund Factsheet

For adviser use only

Royal London Sustainable

Classification: Sustainable
Management style: Active

Introduction

Royal London have a range of three equity targeted multi-asset funds that are mapped to several risk ratings agencies. The range will cover the risk appetite for most medium to higher risk clients.

Name Launch Date IA Sector Portfolio OCF* Fund Size (m)
Royal London Sustainable Managed Growth Trust 04/12/2012 Mixed Investment 0-35% 0.67% £1,078.7
Royal London Sustainable Diversified Trust 24/07/2009 Mixed Investment 20-60% 0.77% £3,480.6
Royal London Sustainable World Trust 21/09/2009 Mixed Investment 40-85% 0.77% £2,907.5
Royal London Sustainable Leaders 29/05/1990 UK All Companies 0.76% £3,131.8

About Royal London

Royal London Asset Management (RLAM) was established in 1988 as a wholly-owned subsidiary of the Royal London Group. They are primarily focussed on providing asset management services to UK clients, and offer a broad range of strategies across a range of core asset classes.

RLAM believe that good investors are good owners. Environmental, Social and Governance issues are increasingly affecting asset prices and they believe it is in the best interests of clients to integrate these issues into the investment process.

Assets under management*

£10.6bn

Total Assets Under Management in the range

*As at 25/08/2022

ESG Process

All companies Royal London add to these portfolios must have good governance and at least one of the two following criteria:

  • The company provides products and services that have a net benefit to society
  • The company is considered an ESG leader relative to its peers.

Royal London have a large sustainable investment team, headed by Mike Fox, one of the fund managers on this range. The team which were established in 2003 have vast experience investing sustainably and work closely together on their ESG processes.

Positive Screening

This range focusses primarily on positive screening and include companies making a positive impact. Royal London’s Responsible Investment team overseas the research into ESG issues, working with the Sustainable Investment team to help influence positive changes in their companies. They vote at annual meetings, engage with management and advocate strong corporate governance.

Exclusion Policies

Negative screening in these portfolios is limited, however, they will automatically screen out companies that are in breach of the UN Global Compact Principles.

Key Themes

At Royal London, they regularly engage with the companies to influence positive behaviour, governance and internal practices. Their six corporate engagement themes are:

  • Climate risk
  • Diversity
  • Social & Financial Inclusion
  • Circular economy
  • Governance
  • Innovation, technology & society

Cost

The OCF for the Diversified and World funds is 0.77%. This is slightly higher than some of the alternatives but still overs good value for an actively managed ESG fund. The OCF for the managed growth is 0.67% which is more competitive with similar alternatives.

*based on a comparison of the average cost of a range of select multi asset active ESG funds

Investment Performance

Over 1 year all three of the multi-asset funds are underperforming their sector peers, however over 3 and 5 years all three of the funds are significantly outperforming the sector average. The Royal London Sustainable Leaders fund is outperforming the sector average over all of 1, 3 and 5 years.

Source FE Analytics, performance measured to 14/09/2022

Past performance is not a reliable indicator of future performance.

Platform availability

Royal London Multi-Asset funds are available on the following platforms:

  • 7IM
  • Abrdn Wrap
  • Abrdn Elevate
  • Advance – Embark
  • AEGON (ARC)
  • AJ Bell
  • Ascentric
  • Aviva
  • Embark
  • Fidelity
  • Fusion
  • Hubwise
  • James Hay
  • M&G Wealth
  • Parmenion
  • Novia
  • Nucleus
  • Quilter
  • Transact
  • Wealthtime

Risk tools

Royal London Multi-Asset funds are mapped to the following risk tools:

  • Dynamic Planner
  • Defaqto

Supporting documents

Tenet Opinion

These are a range of established funds run by a very experienced sustainable investing team who have also developed a robust ESG/sustainable policy in place.

Exclusions are limited in this portfolio and wouldn’t be suited to clients with strong preferences to negative screening. For example, they won’t automatically exclude an alcohol production company with good governance, water management processes and robust recycling process.

Clients who are wanting to invest positively and in companies who are improving processes should consider these funds.

Information approved for Professional Adviser use only and should not be relied upon by private investors (this is not for Retail Clients).