Wellington Global Impact GBP S AccU


February 2025
 
  • Opinion
    Square Mile rating
  • Performance
    3 years annualised returns
    5.97%
    % of time met performance objective over 5 years
    0.0%
  • Risks
    Risk of asset class
    1 2 3 4 5 6 7 8 9 10
    Risk of fund within asset class
    1 2 3 4 5
  • Costs
    Ongoing charges
    0.80%
    Transaction costs
    0.21%
    Total cost of investment
    1.01%
  • Responsible
    What type of investor are you?

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2025.

Overview

The Wellington Global Impact fund was launched in 2016 as the first offering to come from the global impact boutique at Wellington. The fund invests in companies that its managers deem are providing sustainable solutions to the biggest environmental and social problems facing the global economy. The bar for impact is particularly high, with materiality, additionality, and measurability all factors considered when assessing the level of impact offered by a company. The resultant portfolio is one with a mid-cap bias and a sizeable emerging markets exposure, which we feel offers differentiation amongst its peer group.

 

Square Mile’s Expected Outcome

We believe outperformance of the MSCI All Countries World Index over rolling five-year periods, through a portfolio of companies providing a sustainable solution to environmental and social challenges, is a reasonable expectation.

Square Mile’s Opinion

We believe the investment philosophy and process developed by Wellington in this strategy delivers a clear positive social and environmental impact. Wellington has a heritage in the space, and we believe the impact investment process is well thought through, comparing companies against the materiality, additionality and measurability of their impact investment case. We believe that these considerations have created a very solid base on which the team has built a credible impact strategy. Security selection is also well supported by the strong team of c.40 equity analysts who interact with the established sustainable investment team formed of over 20 analysts. The Global Impact strategy was launched at the end of 2016, which represents a fairly long period of time compared to most peers in the space. We would highlight that the fund will typically have a bias towards mid-cap equities when compared to the wider index, in addition to a focus on equities displaying high growth potential. In addition, the portfolio will avoid a number of sectors which have material negative externalities, such as energy and materials. The result is a portfolio with a high active share, and as such investors should expect to see periods of underperformance, when the part of the market the fund avoids is in vogue. Conversely, the fund should perform well when mid-cap growth stocks are in favour. Whilst we expect an element of variability in its return profile, predominately due to its investment focus, we expect over the long-term the fund to deliver on both its financial and impact goals.

Fund Manager’s Formal Objective

The Fund seeks long-term total returns (income and capital appreciation). The Fund has a sustainable objective to seek to understand the world's social and environmental problems and to identify and invest in companies that it believes are addressing these needs in a differentiated way through their core products and services.

Capital Accumulation Ireland
Active MSCI ACWI
Equity IA Global
- £822M
Jason Goins -
17.4 Pounds -
GBP 03/10/2018
17.4 Pounds 31/12/2024
0.00% -
- -

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2025
 
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Asset Manager Overview

Based in Boston, Wellington Investment Management are one of the world's largest privately owned fund managers, responsible for over $1tn of assets under management. Founded in 1928, and operated as a private partnership since 1979, it has c.200 active partners, and over 1000 investment professionals at the firm, serving over 60 client locations by country. Wellington believes a private partnership structure aligns its interests with those of its clients and lends itself to stability in ownership and management, attracts talent, mitigates key-person risk, and promotes long-term succession planning.The business model is focused on investment management founded on in-house and proprietary research driven by career analysts. Wellington considers material ESG analysis and integration as both return enhancing and risk mitigating - ESG factors are therefore very much embedded in the investment process, aided by the collaborative culture across the equity, fixed income and ESG research teams. We believe the partnership structure aligns the ambitions of staff to those of the business, which is centred on delivering the best possible client outcomes. 

Fund Manager/Team Overview

The Global Impact Portfolio is managed by Jason Goins as lead PM, with Tara Stilwell as his deputy. Mr Goins joined the Impact team at the end of 2018, and prior to joining the team, spent 11 years at the firm as a member of the Emerging Companies team which focused on small/mid cap companies. Ms Stilwell joined Wellington in 2008, is a partner of the firm and brings portfolio construction and risk management experience to the Impact team. In addition, she has extensive global experience, particularly in emerging markets. They are both supported by dedicated analysts Marjorie Winfrey and Sean Macdonald. Alongside this, Campe Goodman, the lead Portfolio Manager on Wellington's Global Impact Bond strategy, helps determine the team's strategic impact research agenda. 

The impact team benefits from the large firm wide resources, getting input from the specialist teams on macro themes, industry trends, and sector relative value views. Security selection is also well supported by a strong team of equity analysts, who interact with the established sustainable investment team formed of over 20 analysts.

Investment Philosophy & Process Overview

The philosophy which underpins the Impact team is the belief that the biggest environmental and social problems facing the world present some of the greatest investment opportunities. This is linked to the notion that addressing these challenges will require significant investment. This investment in turn creates an opportunity for innovative companies to benefit from growing end markets. 

The team at Wellington believes that the market often undervalues the scale and duration of growth which can be extracted from this area of the market, aiming to identify underappreciated value within the impact universe. Additionally, it believes the global impact universe has greater growth than the market, lighter analyst coverage (therefore is more inefficiently priced by the market) and elevated stock dispersion (allowing for alpha opportunity for an active manager). 

The first part of the process is to identify the opportunity set based on a company's alignment to one of the 11 impact themes. The initial step is to source these businesses from the team's own research process, as well as leaning on the resources of the dedicated research associates, notwithstanding Wellington's global industry analysts and network of portfolio managers and analysts. In defining the opportunity set, both quantitative and qualitative considerations are taken into account to fulfil each of the three impact criteria: Materiality – the impact activity must be central to the firm. Impact must represent a minimum of 50% of a company's revenues.Additionality – the impact case must fulfil unmet social and environmental needs. The end goal of the analysis is to ensure that the impact has a low probability of being met by other agents.Measurability – the impact case must be quantifiable. Every company must have at least two measurable KPIs which will be tracked across the lifespan of the investment. Once a company has been identified for inclusion in the proprietary impact universe, the team then focuses on the fundamental strength of a business. The team is looking for companies which fit three criteria: uniqueness of assets, the growth prospects for the industry, and the company's discipline when allocating capital. ESG analysis is also fully incorporated into the fundamental analysis of a firm. 

Following the first steps of the fundamental analysis, the team assigns a price target for each stock, using a 10-year DCF model, to understand a stock's potential. In constructing the portfolio, the managers aim to ensure that stock selection is the primary driver of active risk. In achieving this, the managers will build a balanced portfolio, based on upside and downside potential, liquidity and active risk. Position sizes range from 0.5% to 5%, with the median position size of 2% over time. 5% is a hard upper limit, whilst some thematic and regional exposures (max. 25% in any single theme, max. 40% in emerging markets) are capped.
 
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ESG Integration

Asset Manager ESG Integration

Becoming a signatory of the UN PRI in 2012, Wellington scored 5 out of 5 in their most recent assessment for Investment & Stewardship policy. Wellington is also signatory of the UK Stewardship Code and has joined several industry initiatives, inclusive of the Climate Action 100+ and being a founding member of the Net Zero Asset Managers Initiative. Wellington considers material ESG analysis and integration as both return enhancing and risk mitigating. Key to this view is the emphasis on materiality, i.e., ensuring social factors are most heavily weighted for healthcare stocks, and environmental factors for renewable stocks. Wellington also believe that through engagement, and thanks to their scale and resources, they can influence corporate behaviour to help build resilience to sustainability risks. ESG factors are therefore very much embedded in the investment process, aided by the collaborative culture across the equity, fixed income and ESG research analyst teams. Each investment team has developed their own integration of ESG considerations into their research and decision-making processes. Investment teams are supported in this integration by Wellington's central sustainable investment team, which is made up of over 30 individuals. This team is divided in three subgroups: research and strategy, climate research and ESG sector research. ESG factors are integrated into investment and risk management processes via the production of ESG research and ratings, conducting ESG portfolio reviews and discussing material ESG risks and opportunities for future engaging with companies. Each portfolio management team also report internally what ESG factors are most important to their fund and how these are integrated within their investment process. With regards to further development, Wellington are in the process of launching a number of climate specific funds, as well as transitioning to solely qualitative ESG assessments across the business. 

 

Fund ESG Integration

At Wellington Management, Environmental, Social and Governance (ESG) factors are integrated within the firm-wide research and portfolio management processes. This is founded in the belief that good ESG practices can lead to strong long-term performance and as such, integrating ESG factors can be both return enhancing and risk mitigating. Thus, ESG analysis is not only an integral part of the team's company research but is also embedded from the start of the investment process applied to this fund. Indeed, these factors are considered both in the analysis of the impact case for a company, and in the analysts' work to identify any potential risks to the financial case for investing in a holding. From the latter perspective, ESG factors are considered alongside valuations and fundamentals to determine whether the growth profile of the business is adequate. The Global Impact Equity team's work and ESG analysis is further enhanced by its ongoing dialogue with the group's ESG Research team, who, on a day-to-day basis, act as a sounding board, offering insights into broader trends and themes, as well as into specific topics or issues that may arise from the team's company research. This ongoing collaboration is also formalised in the form of the Impact Committee, which is responsible for defining the investment universe of impact companies eligible for the fund. Members of the ESG research team attend the meeting to share their perspectives on environmental and social topics, highlighting the most attractive opportunities and also the highest ESG risks in holdings considered for the fund. Following the adoption of the SFDR regulation in March 2021, a series of exclusions have been formally applied to the fund. These include thermal coal, nuclear power, oil reserves, tobacco, weapons, civilian firearms, defence, adult entertainment, gambling, alcohol and companies failing to comply with the UN Global Compact principles. 
 
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Responsible Investing Approach

The impact team looks for opportunities in companies that are both financially attractive and that deliver a meaningful social and/or environmental impact. The impact approach was developed in 2015 by the impact team at Wellington, and focuses on 11 impact themes, within three broad categories: 
1) Life essentials: affordable housing, health, clean water and sanitation, sustainable agriculture and nutrition. 
2) Human empowerment: safety and security, education and job training, digital divide, financial inclusion. 
3) Environment: alternative energy, resource efficiency, resource stewardship. In order to define the opportunity set, the Wellington impact team uses both quantitative and qualitative considerations to fulfil the following three criteria for impact: 
Materiality: The impact activity must be central to the firm/organisation/issue. The majority of revenues is driven by business that aligns to the impact themes. The materiality of impact activities to a company's overall activity must be greater than 50% of revenues. 
Additionality: The impact case must fulfil unmet social and environmental needs. The end goal of the analysis is to ensure that the impact has a low prospect of being met by other agents. 
​Measurability: The impact case must be quantifiable. The team has developed key performance indicators (KPIs) to understand the nature of the impact generated by the company, its alignment with the strategy's themes and the impact progress over time. 

Risk Summary

This fund seeks to achieve its investment objective by investing in companies whose products and services are considered by the Investment Manager as contributing to positive environmental or social change. Investors should be aware that investing in a responsible manner can be a very subjective issue and may be defined very differently by investors. It is therefore important that investors are aware of the managers' responsible investment approach to ensure it is not misaligned with their own preferences. The responsible investment approach followed by the team means that the composition of the fund is expected to be materially different to the index, with it being completely absent from certain areas of the market, for example energy and materials. Therefore, when investors are favouring these types of businesses the fund has the potential to lag the wider market. The team’s focus on mid-cap growth stocks should see the fund outperform the market when this style of investing is in favour and underperform when it is not. In addition, the fund invests overseas, including emerging markets, therefore is exposed to currency movements and at times, higher volatility. To minimise the impact of such risks, we believe any investment in the fund should be considered over at least five years, in line with the managers' own objective.

 

Additional Information

5.97%
14.79%
-20.04%
9.32%
-11.31%
0.04
0.04

(3 years data to last month end unless otherwise stated)

Qualitative Risk Assessment

Significant Potentially Significant Not Significant

For the full summary of the risks, click here
 
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3 Year Rolling Sector Outperformance

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 4th March 2025. Share price total return.

  

Maximum Drawdown (Rolling 12 Months)

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 4th March 2025
 

Calendar Year Performance To Quarter End

Period Fund (%) Sector (%)
2024 11.0 12.7
2023 6.9 12.5
2022 -13.2 -11.1
2021 11.9 18.2
2020 27.1 15.1

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 14th February 2025

Value for Money

The fund’s ongoing charge figure (OCF) is relatively attractive to the peer group, whilst the transaction costs are above the median for the sector. The total cost of investment (TCI) is therefore around the peer group median. Overall, we feel that the investment proposition represents good value for money.

OCF v Peer Group

0.80%
Transaction Costs v Peer Group

0.21%
TCI v Peer Group

1.01%

Source: Square Mile and LSEG Lipper (all rights reserved), Data as at: 31st January 2025.
 
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Square Mile Analysts

Ajay Vaid - Investment Research Analyst

Charlie McCann - Investment Research Analyst
 

The Square Mile ratings are reviewed every 6 months. For full details on the methodologies, click here.

For a full list of all Square Mile rated funds, click here.

Disclaimer

This document is issued by Square Mile Investment Consulting and Research Limited which is registered in England and Wales (08791142) and is a wholly owned subsidiary of Titan Wealth Holdings Limited (Registered Address: 101 Wigmore Street, London, W1U 1QU).

Unless otherwise agreed by Square Mile, this factsheet is only for internal use by the permitted recipients and shall not be published or be provided to any third parties. This factsheet is for the use of professional advisers and other regulated firms only and should not be relied upon by any other persons. It is published by, and remains the copyright of, Square Mile Investment Consulting and Research Ltd (“SM”). SM makes no warranties or representations regarding the accuracy or completeness of the information contained herein. This information represents the views and forecasts of SM at the date of issue but may be subject to change without reference or notification to you. SM does not offer investment advice or make recommendations regarding investments and nothing in this factsheet shall be deemed to constitute financial or investment advice in any way and shall not constitute a regulated activity for the purposes of the Financial Services and Markets Act 2000. This factsheet shall not constitute or be deemed to constitute an invitation or inducement to any person to engage in investment activity. Should you undertake any investment activity based on information contained herein, you do so entirely at your own risk and SM shall have no liability whatsoever for any loss, damage, costs or expenses incurred or suffered by you as a result. SM does not accept any responsibility for errors, inaccuracies, omissions, or any inconsistencies herein. Unless indicated, all figures are sourced by LSEG Lipper (all rights reserved). Past performance is not a guide to future returns.

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