Resource Efficient European Equities Fund marks one-year track record
We launched the European Equities Fund** in January 2021 to address the needs of investors seeking to disaggregate their global equity exposure, as regional economies address their economic recoveries post-peak pandemic. The Fund is well-positioned to take advantage of the political support and regulatory pressure forcing companies to act on their environmental initiatives. We believe this, combined with very high environmental disclosers across carbon water and waste, positions the Fund well for future success.
The Fund has demonstrated positive returns relative to the MSCI Europe benchmark since its launch in January 2021 (see full performance) while significantly reducing the environmental footprint of the portfolio.
- During its first year, the Strategy has delivered an absolute return of 23.61% gross and 23.01% net, outperforming the MSCI Europe Index by 0.97% and 0.54% respectively.
- The strategy has delivered significant reductions in ownership of Carbon (72%), Water (70%), and Waste (62%) *** relative to the benchmark while remaining invested across the broader economy
The Osmosis Resource Efficient European Equity Fund is constructed utilising Osmosis’s proprietary environmental research, which identifies companies that are more resource efficient in creating economic value than their same sector peers and will allow investors to target an uncorrelated source of sustainable alpha from their European equity exposure.
The portfolio is fully aligned with Osmosis’s ethical exclusion policy which excludes tobacco and all companies that are in breach of the UN Global Compact Principles.
As of 31 January 2022, Osmosis’s total environmental assets under management were at $3bn* with over $2bn tracking its core suite of portfolios.
A unique sustainable factor based on Resource Efficiency
Identification of corporate Resource Efficiency as an uncorrelated sustainable alpha signal is a challenge solved by only a few in the ESG space.
The Resource Efficient European Equities Fund is the product of extensive research, correlation, and attribution analysis on our proprietary Resource Efficiency Factor.
Developed over 12 years, our proprietary and objective environmental research process has enabled the identification of companies that are better placed to deal with the increasing number of environmental challenges that lie ahead. At the same time, those companies that refuse to change or are too slow to adapt will continue to destroy shareholder value.
A broad economy approach
A significant environmental impact
The outcome of this sophisticated core replacement strategy is a significant reduction in the portfolio’s environmental footprint. The Strategy delivers significant reductions in ownership of Carbon 72%), Water (70%), and Waste (62%) relative to the benchmark while remaining invested across the broader economy.
Osmosis believes that the planet’s long-term sustainability demands a re-evaluation of overall resource consumption. Carbon, Water, and Waste are subject to increasing regulation, cost pressure, and social scrutiny. Companies focused on environmental impact need to address those aspects of consumption and pollution that are most relevant to their business model, which will often include the mitigation of resources in addition to Carbon. Osmosis’ research demonstrates that this three-factor approach also delivers a more reliable investment signal.
*Osmosis Investment Management UK Ltd (“OIM UK”) is an affiliate of Osmosis Investment Management US LLC (“OIM US”). Osmosis Investment Management AUM includes discretionary assets under management of OIM US and OIM UK and assets invested in model programs provided by OIM US and OIM UK.
**This Fund is not available for U.S. Investors. Separate accounts are available for U.S. investors using the same model and investment objective of the Fund.
* **The footprinting metrics above have been calculated using a Total Metrics approach, apportioning carbon emissions, water consumption, and waste generation to the investor based on an equity ownership perspective. Calculating the “owned” emissions, water, and waste from each position in the portfolio and benchmark, and adding those metrics yields the total impacts for the portfolio. The calculations have been based on metrics recorded in the MoRE DataBase where available, and industry averages have been used to estimate any gaps in the data coverage.
Performance. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
An investor’s actual account is managed by Osmosis based on the strategy, but the actual composition and performance of the account may differ from those of the strategy due to differences in the timing and prices of trades, and the identity and weightings of securities holdings.
Past performance may not be indicative of future results. Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy will be profitable. No current or prospective client should assume that future performance will be profitable, equal the performance results reflected, or equal any corresponding historical benchmark index. For reasons including variances in fees, differing client investment objectives and/or risk tolerance, market fluctuation, the date on which a client engaged Osmosis’s services, and any account contributions or withdrawals, the performance of a specific client’s account may have varied substantially from the referenced performance results. In the event that there has been a change in a client’s investment objectives or financial situation, the client is encouraged to advise us immediately. It is important to remember that the value of investments, and the income from them, can go down as well as up and is not guaranteed and that you, the investor, may not get back the amount originally invested. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Osmosis accepts no liability for any failure to meet such forecast, projection or target. Past performance is not an indication of future performance.
Net Performance. Net returns are net of fees and in USD unless indicated otherwise. Net returns are net of fees, costs, and dividend withholding tax. Different fees may apply to a client’s account and a client’s returns may be further reduced by the advisory fee and other expenses incurred in the management of its account. Please see the specific performance disclosure under each slide for additional details. Our fees are fully disclosed in Part 2A of Form ADV and may be updated from time to time.
The historical index performance results for all benchmark indexes do not reflect the deduction of transaction, custodial, or management fees, the incurrence of which would have the effect of decreasing indicated historical performance results. Indexes are unmanaged and are not available for direct investment. The historical performance results for all indices are provided exclusively for comparison purposes only, and may or may not be an appropriate measure to provide general comparative information to assist an individual client or prospective client in determining whether Osmosis performance meets, or continues to meet, his/her investment objective(s). The referenced benchmarks may or may not be appropriate benchmarks against which an observer should compare our returns.
The MSCI Europe Index captures large and mid-cap representation across 15 Developed Markets (DM) countries in Europe