The world’s greatest investors: Audrey Ryan

 Audrey Ryan
Ethical fund manager Audrey Ryan

Ryan studied accounting at Napier University and a Masters in Investment Analysis at Stirling, then joined small private auditor Bell and Company. Her long-standing interest in financial markets took her to General Accident in 1995, then Scottish Equitable (now known as Kames) in 1997. Within two years she became manager of the Ethical Equity Fund. She also co-manages the Ethical Cautious Managed and UK Opportunities funds.

What is her strategy?

Kames Ethical Equity is a “dark green fund” – it excludes companies that engage in ethically dubious services such as gambling or arms dealing. An external company does the initial screening, which Kames supplements with in-house research on areas such as human rights. Ryan then picks from the remaining companies, based on both internal research and meetings with company management.

Like many ethical managers, her portfolio tilts toward small and mid-caps and growth companies. Between July 2001 and the end of 2016, the fund returned 224% (7.9% a year, including dividends). By contrast, the FTSE All-Share returned 143% (5.9%). Ryan beat the main ethical benchmark by an even wider margin, with the FTSE4Good returning only 52% during this period (2.8% a year).

What was her most successful investment?

Ryan first bought global recruiter Robert Walters in January 2005, and increased her funds’ holdings several times. Thanks to repeatedly beating earnings expectations the stock price has risen from 124p to around 672p now, an increase of 437%. A more recent success is software company Aveva, which she bought in April 2016 at around £16, impressed by the quality of its technology. The company now trades at nearly £30 a share.

What lessons can investors learn from her?

Many people argue that ethical investing inevitably means lower returns, because it forces you to avoid sectors that have done well in the past, most notably tobacco. However, Ryan’s strong performance proves them wrong. Indeed, it could be argued the restrictions of ethical investing force managers to be more adventurous and focus on smaller, more dynamic companies, rather than just the usual suspects.