Three sustainable stocks that are doing well by doing good
Professional investor Peter Michaelis of the Liontrust Sustainable Investment Team picks three stocks to buy that are helping to create a cleaner, safer and healthier society.
For the past 20 years we have been running our Sustainable Future (SF) funds. They are based on the belief that in a fast-changing world the companies likely to survive and thrive are those helping to create a cleaner, safer and healthier society.
We combine negative and positive screening with identifying key structural growth trends that will shape the sustainable global economy of the future. We view the world through three megatrends: better resource efficiency (cleaner), improved health (healthier) and greater safety and resilience (safer) – and then identify 21 themes within these.
Our strategy seeks to generate strong returns while benefiting society by identifying long-term transformative developments such as technological and medical advancements. We focus on well-run companies that capitalise on these changes.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Making money from good work
We also require excellence in environmental, social and governance (ESG), and our holdings will tend to have processes in place to manage customer relationships, employees and supply chains. We have long believed that outperformance on social issues will deliver more resilient businesses over the long term. We bring all this information into our forecast earnings for companies, only selecting those that can make money from their good work.
The shift to personalised medicine
Illumina (Nasdaq: ILMN) is a global leader in gene sequencing and a great example of a company exposed to a powerful trend. Held under our enabling-innovation-in healthcare theme, the company’s ability to read and interpret a patient’s DNA is a core first step in the shift towards more personalised medicines and it continues to lower the cost of gene sequencing over time. Their work is a highly positive development for patients.
Learning Technologies Group (Aim: LTG), which fits into our providing-education theme – part of the improved-health megatrend – boasts a collection of e-learning, compliance, training, human resources software and content brands. The company continues to consolidate the e-learning sector with acquisitions designed to cross-sell to new customers and access new technologies and geographies.
A low-cost investment platform
Avanza Bank Holding (Stockholm: AZA) is an investment platform based in Sweden serving around 1.4 million individuals. By providing a low-cost way for people to manage their savings and investments, it is exposed to our saving-for-the-future theme. The company releases monthly data on new customer numbers, net inflows and trading volumes, and continues to surprise us with its growth and engagement levels of the customer base.
Over our first 20 years of managing the SF funds, our process was successful precisely because it identified companies that have provided something society needs, and this will hold true for the next 20 years and beyond. What 2020 revealed clearly, however, is that the economy and capital markets have to be the servants of society and not the other way around. A sustainable society needs to provide opportunities for everyone and also operate within planetary boundaries in a way that preserves and enhances nature.
-
Barclays warns of significant rise in social media investment scams
Investment scam victims are losing an average £14k, with 61% of those falling for one over social media. Here's how to spot one and keep your money safe
By Oojal Dhanjal Published
-
Over a thousand savings accounts now offer inflation-busting rates – how long will they stick around?
The rate of UK inflation slowed again in March, boosting the opportunity for savers to earn real returns on cash in the bank. But you will need to act fast to secure the best deals.
By Katie Williams Published
-
The industry at the heart of global technology
The semiconductor industry powers key trends such as artificial intelligence, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Three emerging Asian markets to invest in
Professional investor Chetan Sehgal of Templeton Emerging Markets Investment Trust tells us where he’d put his money
By Chetan Sehgal Published
-
What to consider before investing in small-cap indexes
Small-cap index trackers show why your choice of benchmark can make a large difference to long-term returns
By Cris Sholto Heaton Published
-
Why space investments are the way to go for investors
Space investments will change our world beyond recognition, UK investors should take note
By Merryn Somerset Webb Published
-
Time to tap into Africa’s mobile money boom
Favourable demographics have put Africa on the path to growth when it comes to mobile money and digital banking
By Rupert Hargreaves Published
-
M&S is back in fashion: but how long can this success last?
M&S has exceeded expectations in the past few years, but can it keep up the momentum?
By Rupert Hargreaves Published
-
The end of China’s boom
Like the US, China too got fat on fake money. Now, China's doom is not far away.
By Bill Bonner Published
-
Magic mushrooms — an investment boom or doom?
Investing in these promising medical developments might see you embark on the trip of a lifetime.
By Bruce Packard Published