Terry Smith launches ‘Comic Relief’ sustainable fund

Terry Smith has launched a sustainable fund for institutional investors after three years running a segregated mandate for UK charity, Comic Relief.

The Fundsmith Sustainable Equity Fund, launched on Wednesday, will use the Comic Relief charity mandate as the basis for its strategy and asset allocation and be run alongside the popular Fundsmith Equity Fund.

It invests across global equities and follows the same strategy as the best-selling equity fund, but excludes any companies across sectors such as aerospace and defence, casinos, gas and electric utility companies and metals and mining. Pornography, tobacco and oil, gas and consumable fuels are also off limits.

Terry Smith, chief executive and CIO of Fundsmith, said: “We have long felt that many investors who apply the commonly used factors to identify sustainable investments do so at the expense of the long term economic sustainability of a business.

“By marrying important sector exclusions with the proven sustainable investment process of Fundsmith we have shown that we can deliver superior investment performance. I believe Fundsmith Sustainable Equity Fund will provide a product that institutional investors both need and want.”

Since inception, the Fundsmith Comic Relief Segregated Mandate has produced an annualised return of 23.9% and the existing Fundsmith Equity product has returned 24.1%.

In total, the Comic Relief mandate has risen 89.4% since inception, more than the MSCI World Index which rose 50.6%.

The sustainable fund  currently holds 22 stocks with an average market cap of £90.5bn, with a high exposure to technology, healthcare and consumer staples.

The minimum investment is £5m.

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