Claudia Quiroz (pictured) is Executive Director for Sustainable Investing at Quilter Cheviot, and is the Lead Fund Manager of Quilter Cheviot’s award winning sustainable investment strategy, the Climate Assets Fund. Quiroz explains that the robust investment process is one of the firm’s key strengths, which is underpinned by Quilter Cheviot’s strong research expertise. The sustainable strategy has a dedicated team of four, while Quilter Cheviot has a team of 10 research analysts who also work closely with the sustainable team.
“We invest in the growth markets of sustainability, delivering lower volatility of returns to our clients, drawn from a range of different asset classes, including global equities, bonds and alternative investments,” Quiroz says. The strategy has GBP200 million in assets, with GBP50 million securitised in the Climate Assets Fund.
“We like to think about sustainable rather than ethical,” Quiroz explains.
Normally the traditional ethical investor focuses on sectors of the economies to avoid such as tobacco or gambling while others look for positive themes such as energy efficiency or access to medicine in the developing world.
“We aim to identify companies that provide solutions to the economic and environmental challenges of urbanisation, notably serving a growing population with finite resources.
“We identify companies offering solutions such as water infrastructure, recycling packaging, organic or sustainable food and technologies to improve agriculture practices, products and services providing solutions for a more efficient economy.”
Quiroz has observed that clients increasingly prefer sustainable investments.
“That’s why we developed this particular strategy,” she says.
“As a firm, we have over GBP21 billion under management so while GBP200 million is a small part of our total assets under management, we developed this investment strategy because of increasing appetite from our clients and charities to look at the world in a different way; moving away from the traditional sectors of the economy like fossil fuels, gambling or tobacco.”
Quiroz finds that investors mistakenly think they will be penalised in terms of returns if they invest sustainably.
“But that is not the case,” she says.
“We have been consistently first quartile within the balanced sector peer group and have demonstrated that the strategy works.”
From launch in March 2010 to the end of March 2017, the strategy has seen a return of 89.9 per cent, against a peer group average of 66.6 per cent and a FTSE UK Private Investor Balanced return of 83.8 per cent.
There are five investment themes in the portfolio: low carbon energy, food, health, resources and water.
We tend to focus on mid to large cap companies, not smaller companies but those that are “established businesses with leading market positions in the markets in which they operate,” Quiroz says. “We are also currently favouring Europe and the US over the UK.
“This is very similar to how we invest throughout Quilter Cheviot. We use the same investment process and these are the key characteristics of the type of investors we are. We have a culture that puts the client first and we try to cater for both our clients’ financial and non-financial needs. We have a robust and repeatable investment process based on a double tiered approach driven by the Chief Investment Officer and the allocation committee which determines our asset allocation, while the bottom up, stockpicking, is driven by our sustainable investing team, tapping into the wider research team. This investment process takes advantage of our understanding of the sustainability themes and our research expertise.”