BL Sustainable Horizon is a global equity fund. Classified Article 9 according to SFDR, it also benefits from independent certifications ‘Label ISR’ in France and ‘Luxflag’ in Luxembourg.
Through a multi thematic ESG approach, the Fund aims to invest in quality companies with sustainable competitive advantages and a strong ESG profile. Within its thematic pocket, the focus is on companies whose products and services directly contribute to the United Nations Sustainable Development Goals.
The company’s financial analysis process is based on BLI's historical “Business Like Investing” investment philosophy.
Performance overview 2022
Note: Performance data net of fees (B share class) in EUR. Past performance is not a guide to future performance. References to a market index or peer group are for comparison purposes only; the market index is not mentioned in the sub-fund's investment policy. Source: BLI/Lipper.
Cumulative performance for 2022
For the whole of 2022, the Fund posted a final performance of -13.2%, close to the MSCI AC World NR index (at -13%) and slightly above the average for international equity funds (at -14.4%).
In a particularly volatile market environment marked by very strong inflationary pressures, a change of tone of central banks that have begun a process of monetary tightening and strong geopolitical tensions; quality growth stocks, in which the strategy tends to invest, have been heavily penalized while value sectors and those sensitive to rising interest rates have fared well.
Overall, both country and sector allocation (both driven by individual stock selection) contributed positively over the year.
Thus, the bias in favor of European companies proved favorable. This bias is mainly due to a higher ESG maturity of European companies that generally have better ESG ratings and provides greater transparency on these elements.
At sector level, unsurprisingly, the absence of Energy (up sharply in 2022) and Finance (favorable impact of the rise in interest rates for banks in particular) weighed on the Fund's relative performance while the overweight in the Industry, Health Care and Consumer staples sectors and the underweight in Technology and Consumer discretionary contributed positively to relative performance.
In terms of individual contributions, the portfolio companies that contributed the most to performance over the period come from different sectors including: Novo Nordisk (Health Care, Europe), Kimberly Clark (Consumer staples, United States), Canadian National Railway (Industry, Canada) and Chr.Hansen (Materials, Europe).
In the same vein, the main detractors came from different sectors but, for the most part, suffered from a difficult environment (zero covid policy in China, impact of inflation on margins, fears of recession). We can cite: Adidas (Consumer discretionary, Europe), SAP (IT, Europe) and SGS (Industrials, Europe).
Positioning
As a reminder, the portfolio is currently structured around two complementary pockets: A quantitative component and a thematic component. The quantitative pocket is geared towards large caps, which, thanks to their size, scope and influence over the entire value chain, have the power and weight to change market practices. The thematic pocket focuses on small- and mid-caps, which are often ‘pure players’ with less complex value chains, subject to less controversy and enabling an impact through the UN Sustainable Development Goals (SDGs).
Recent changes in the portfolio
During the second half of the year, the Fund Manager shifted the portfolio with the objective of increasing investments related with the Sustainable Development Goals (thematic pocket).
Several new positions joined the portfolio: Biomérieux (French diagnostic company - Contribution to SDG 3 ‘Good health and well-being’), Ansys (leader in simulation software used in product design and optimization - Contribution to SDG 9 ‘Building a resilient infrastructure, promoting sustainable industrialization that benefits everyone and encourages innovation’), Coloplast (products for ostomies and incontinence - Contribution to SDG 3 ‘Good health and well-being’) and finally Advantest (manufacturer of test equipment for the semiconductor industry - Contribution to SDG 9 b ‘Supporting research, development and technological innovation’).
Current positioning
The Fund invests in 36 individual positions while the top ten positions represent 41% of the portfolio.
The sector allocation remains representative of the investment methodology implemented with a strong presence of stocks in the Healthcare, Industrials and Consumer staples sectors in particular and the absence of the Energy, Finance and Utilities sectors.
Sector allocation at 30/12/2022
In terms of ESG profile, the thematic pocket continues to gain in importance and now accounts for 42% of the portfolio (at the end of 2021, it was still only 30%).
ESG allocation at 30/12/2022
The sustainability themes covered in the thematic component break down as follows:
- Breakdown of key sustainability themes at 30/12/2022 (thematic component) -
