The Perennial Better Future Strategy has reached its five-year milestone with ~$250 million in funds under management and a track record of outperforming the Small Cap Accumulation benchmark.
The Fund, which sits under the Perennial Partners umbrella, pursues strong, consistent returns while investing in mainly smaller and mid cap companies positively shaping a better future.
Since inception over five years ago the Perennial Better Future Trust has delivered 7.2% p.a. return after fees, outperforming its benchmark, the S&P/ASX Small Ordinaries Accumulation Index, by 3.9% p.a. (as at 31 March 2023).
With an authentic approach to sustainable investment, the strategy invests in areas such as healthcare, education, renewable energy, technology improving energy efficiency, resource use or reducing greenhouse gas emissions, environmental services, companies contributing to social welfare outcomes, including improving the safety, health or well-being of workers. Approximately 50% of the portfolio lay within these higher impact sectors (as at 31 March 2023).
Marking the fifth year, the Better Future team has calculated the total impact of the strategy since inception and the results are compelling.
Perennial Better Future Portfolio Manager, Damian Cottier, says: “The portfolio has derived meaningful impact over the five years since its inception. This is a characteristic we have grown to understand our clients value greatly.It is pleasing to have demonstrated outperformance over the medium and long term while providing positive social and environmental outcomes.”
As a result of investing in Better Future enablers – companies that typically have a relatively lower environmental footprint – the carbon intensity of the portfolio is 83.1% less than the benchmark.[1]
Over the past five years, the Better Future team has demonstrated its thought leadership in the ESG investing landscape, through participation in industry initiatives including educational webinars, panel presentations, surveys and collaborative industry groups such as Climate Action 100+ and IAST-APAC.
Additionally, since inception, the team has conducted over 1,000 meetings with portfolio companies, including over 250 dedicated ESG meetings. The Better Future team believes that company engagement is crucial in helping companies to progress their ESG practices and ultimately, generate improved ESG outcomes.
Recent engagement areas of focus include:
- gender diversity at both the board and senior executive level. Since inception, 68 female directors have been appointed to the boards of companies held in the Better Future Trust, typically following the team’s engagement. In March 2023, Perennial Better Future, in collaboration with Perennial Smaller Companies and Perennial Private Investments held the Inaugural Perennial Diverse Boards Event – an event constructed of boards in our portfolio in need of greater diversity to meet potential female directors. It featured 14 investee companies and 16 directors in a “speed networking” format;
- disclosure of greenhouse gas emissions and setting of reduction targets; and
- modern slavery.
Emilie O’Neill, Co-Head of ESG and Equities Analyst concluded, “We are extremely pleased to have been able to provide institutional, wholesale and retail investors access to companies shaping a better future within the Australian marketplace.”
The Better Future Trust is certified by the Responsible Investment Association of Australia and was the winner of the “Sustainable and Responsible Investment – Growth” category at the Zenith Fund Awards in 2022. It has a “Recommended” Investment rating from both Zenith and Lonsec. It has an “Impact” Sustainability rating from Lonsec and a “5 bees” Sustainability Score from Lonsec – each of which is the the highest rating available.
1 Carbon intensity (tCO2e per $ revenue) of Perennial Better Future Investments compared to ASX Small Ordinaries benchmark. Holdings as at 31 December 2022.
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Lonsec disclaimer:
The rating issued 09/2022 (Research rating) & 03/2023 (Sustainability score) for Perennial Better Future Trust are published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.
Zenith disclaimer
The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned March 2023) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual, including target markets of financial products, where applicable, and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at Fund Research Regulatory Guidelines.
