Kempen Global Sustainable Equity Fund N.V.

Profile

The Fund offers the opportunity to invest in a diversified portfolio of companies worldwide which comply with strict sustainability criteria. Investments in the Fund are screened by an independent data provider to assess compliance with environmental, social and governance (ESG) criteria. The Management Company uses strict sustainability criteria that minimises or excludes investments in companies involved in controversial activities such as alcohol, tobacco and adult entertainment. The Fund strives to select investments with the focus on the long-term and sustainable growth. The Fund strives to select companies that have well integrated ESG in their strategy and are in a position to create sustainable value in the long-term. Contribution to the transition to a more sustainable economy is taken into account in the investment process.

Management team

Richard Klijnstra, Mark Oud, Martijn Kleinbussink

Performance per 2019-09-30 (rebased)

No chart data available

Performance per 2019-09-30

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  Fund Benchmark
1 month 3.6 % 3.2 %
3 months 5.7 % 5.0 %
This year 25.3 % 23.3 %
2016 16.7 % 10.7 %
2017 6.1 % 7.5 %
2018 -3.0 % -4.1 %
1 year (on annual basis) 13.3 % 8.5 %
3 years (on annual basis) i 12.4 % 11.3 %
5 years (on annual basis) i 9.3 % 10.4 %
Since inception (on annual basis) i 10.2 % 12.3 %
Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future. Due to Easter a deviating net asset value (NAV) is used for the calculation of the performance figures. The NAV is calculated based on the closing prices of the Fund investments per 29 March 2018 (Europe), the closing prices of 2 April 2018 (North America) and calculated based on ‘snapshots’ prices of 3 April 2018 (Asian and Pacific investments).
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 83.58 M 2019-09-30
Share class size
EUR 83.58 M 2019-09-30
Number of shares
1,039,121 2019-09-30
Net Asset Value i
EUR 80.27 2019-10-18
Transaction price i
EUR 80.47 2019-10-18
Morningstar rating â„¢

Fund characteristics per 2019-09-30

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  Fund Benchmark
Number of holdings 42 1648
Dividend yield i 1.92 % 2.40 %
Weighted average market capitalization i EUR 145,324 M EUR 158,625 M
P/E ratio i 19.11 16.70
Active share i 90.40 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Portfolio developments per 2019-09-30

September was marked by the reversal of the momentum – value trade, where value showed significant outperformance. In September, the fund earned a return of 3.6% versus a return on the MSCI World Index of 3.2%. The consumer discretionary, industrials and financials sectors made the largest positive contributions to the result, while healthcare and consumer staples lagged significantly.

Nike, Valeo and Deere accounted for the largest contributions to the performance. Nike reported another set of strong results. The DTC strategy is gaining more and more traction, driving margins higher. The strategy also helps Nike to sell more products at full price.

Visa, Mastercard and IQVIA made the largest negative contributions to the return. The trio seemed, to some extent, to be victims of the trade out of low vol/quality/momentum.

September was an important month for the fund because we learned how the market perceives our investments.

Investors talk a lot about growth versus value. We want to give our perspective on this discussion. In the investing world you have (simply put) two different ways of valuing a company:

*A valuation primarily about numbers where stories are considered distractions that bring irrationalities or;

*Investing is mainly about great stories and that it is foolish to estimate the numbers

Numbers and stories find a common language in finance jargon, where you talk about sales growth or earnings growth. We call this the narrative around a company. It is this narrative that sets the valuation of the company.

A narrative and thus valuation can be skewed towards the numbers as much as it can be around potential growth or future cashflows. It is not static and can break, shift and change.

Today we want to zoom in on what we call the narrative of ‘profitless growth’. This narrative encompasses companies that are growing rapidly at (ever increasing) losses, promising massive future cash flows. Well-known examples are Uber, Spotify and Tesla.

In order to understand the September performance, we have to go back to 9 January, where we find the headline of WeWork raising US$1bn from Softbank at a US$47bn valuation, despite heavy and increasing losses. By doing so, Softbank turned WeWork into the posterchild of the ‘profitless growth’ narrative. A narrative that had already started to crumble as the IPOs of two other Softbank darlings, Uber and Slack, were not going as well as planned.

So, when 8 months later the WeWork IPO became a disaster, it changed the market. The pendulum swung from the Story dominating the valuation of WeWork to the Numbers dominating the valuation. And the numbers are less fond of profitless growth. Overnight “Broken IPOs have broken growth and momentum!” has emerged into the mainstream.

In September the MSCI World Value Index returned about 4%, the MSCI World Growth Index 0.5% and the overarching MSCI World Index about 3%. We are considered as Large Cap Growth at Morningstar. Therefore you would assume we underperformed in September. Yet we have seen that our portfolio has outperformed slightly over the past month.

What sets us apart from the broader MSCI World Growth Index is our focus on profitability. Our approach combines and balances stories with numbers. This has helped us navigate an otherwise difficult market for growth.

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What kind of companies do we seek?
We seek profitable companies undergoing structural growth that will create shareholder value in the long term alongside a clear social mandate.

The best results are achieved if the interests of all the stakeholders are aligned. This requires not only products and services but also operations to be in line with the wishes and requirements of society (licence to operate).

Moreover, the companies need to have sufficient opportunities for growth to be able to invest at an attractive return (innovation and expansion).

In order to sustain earnings growth over the long term, companies need to enjoy sustainable competitive advantages compared to existing and new competitors (strong strategic position).

The role of management
We expect management to pursue a long-term strategy in addition to conducting sound day-to-day management. The risks and opportunities relating to ESG need to be clearly incorporated, backed up by sensible investment plans that respond to long-term trends and match the company’s strategic positioning and growth opportunities.

Quality and valuation
We believe the selected companies are above-average quality in terms of strategy and operations and are capable of creating long-term value for all stakeholders. Depending on the absolute valuation of their equities, they could form an interesting addition to the portfolio.
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2019-09-30 (rebased)

No chart data available

Performance per 2019-09-30

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  Fund Benchmark
1 month 3.6 % 3.2 %
3 months 5.7 % 5.0 %
This year 25.3 % 23.3 %
2016 16.7 % 10.7 %
2017 6.1 % 7.5 %
2018 -3.0 % -4.1 %
1 year (on annual basis) 13.3 % 8.5 %
3 years (on annual basis) i 12.4 % 11.3 %
5 years (on annual basis) i 9.3 % 10.4 %
Since inception (on annual basis) i 10.2 % 12.3 %
Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future. Due to Easter a deviating net asset value (NAV) is used for the calculation of the performance figures. The NAV is calculated based on the closing prices of the Fund investments per 29 March 2018 (Europe), the closing prices of 2 April 2018 (North America) and calculated based on ‘snapshots’ prices of 3 April 2018 (Asian and Pacific investments).

Dividends

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Distributing
Yes
Last dividend
EUR 1.60
Ex-date last dividend
2019-02-13
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2019-09-30

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  3 years Since inception
Maximum drawdown i -9.65 % -14.32 %
Tracking error i 3.18 % 3.62 %
Information ratio i 0.33 -0.59
Beta i 0.99 0.92
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Top 5 contribution (2019-09-30)

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  Contribution i Performance i
Nike Class B 0.31 % 12.27 %
Deere 0.29 % 10.50 %
Valeo 0.28 % 19.77 %
Allegion 0.24 % 9.05 %
Taiwan Semiconductor Manufacturing (US) 0.23 % 10.93 %

Bottom 5 contribution (2019-09-30)

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  Contribution i Performance i
IQVIA -0.09 % -2.74 %
Mastercard -0.08 % -2.50 %
LHC -0.07 % -3.20 %
Visa Class A -0.06 % -3.91 %
Lonza -0.06 % -3.32 %

Geographic allocation (2019-09-30)

48.8 %
United States
11.1 %
United Kingdom
8.1 %
Ireland
6.1 %
Switzerland
4.7 %
Germany
3.7 %
France
3.3 %
Denmark
3.2 %
Netherlands
2.3 %
Norway
2.3 %
Taiwan
1.4 %
Spain
2.1 %
Other
3.1 %
Cash
Total
100 %

Top 10 holdings (2019-09-30)

4.2 %
Microsoft
3.6 %
Alphabet Class A
3.2 %
Mastercard
3.2 %
IQVIA
3.1 %
Estee Lauder
3.1 %
Medtronic
3.0 %
Croda
3.0 %
Deere
2.8 %
Roche Holding
2.8 %
Marsh & McLennan Companies
Total
32.0 %

Sector allocation (2019-09-30)

21.6 %
Health Care
21.6 %
Consumer goods
16.0 %
Financials
15.3 %
Technology
11.8 %
Industrials
6.0 %
Basic Materials
3.1 %
Other
2.7 %
Consumer services
2.1 %
Telecommunications
Total
100 %
The cash position is included in ‘Other’.
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Ongoing charges

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Management fee i
0.50 %
Service fee i
0.20 %
Expected ongoing charges i
0.73 %
Ongoing charges last financial year i
0.80 %
The Ongoing Charges Figure of the last financial year relates to 2017/2018.

The service fee is determined annually on basis of the net asset value as of the last day of the previous financial year:
< or equal to EUR 200 million: 0.20%
Between EUR 200 million and EUR 700 million: 0.15%
>EUR 700 million: 0.10%

As of 1 February 2019 the management fee is decreased from 0.60% to 0.50% and as a result the expected Ongoing Charges Figure decreased to 0.73%.

Other costs

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Upward swing factor i
0.25 %
Downward swing factor i
0.15 %
As of 1 January 2018 the swing factor is adjusted from 0.25%/0.25% to 0.25%/0.15%.
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Investor type
Institutional & Private
Distributing
Yes
Benchmark i
MSCI World Total Return Index Net (dividends reinvested, calculated in Euro's)
Investment category
Sustainable Value Creation
Universum
Global equities
Inception date
2013-09-18
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Administrator
BNP Paribas Securities Services S.C.A.
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A.
Morningstar rating â„¢

Tradability

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Listed
yes, listed on the NAV Trading Facility of Euronext
Subscription/Redemption Frequency
Daily
ISIN i
NL0010558854
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global SustainableEquity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Kempen's vision & mission

Kempen Capital Management is an asset manager that believes in stewardship and investment focusing on the long-term for the benefit of all stakeholders. Value creation is at the heart of the services we provide to our clients. We believe that being an engaged shareholder on environmental, social and governance (ESG) issues and retaining a long-term focus, is critical to helping our clients to preserve and create sustainable wealth that has positive real world impact and economic returns.

Kempen wide approach to responsible investment

We are committed to create sustainable alpha. The four pillars of our ESG-policy are:

  • ESG integration: Ensuring sustainability risks and opportunities are adequately considered in our investment analysis and processes.

  • Exclusion & avoidance: Not investing in companies involved in controversial activities or conduct.

  • Active ownership: Being responsible stewards of our clients’ capital and using our influence through engagement and voting to improve corporate behaviour on specific ESG issues and achieve positive change

  • Positive impact: Investing with an objective to achieve positive real world outcomes and impact, such as contributing to the UN Sustainable Development Goals.

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To put our mission and vision into practice we engage with our investee companies on a wide array of strategic, financial, and ESG topics. As an active owner we use our influence to improve our investee companies’ ESG performance.  This helps us address some of the most pressing and important sustainability issues facing business and the world. Our focus themes for engagement are: human rights, labour rights, climate change and governance.

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Through collaboration with other investors and industry think tanks we contribute to the development of principles and standards of corporate responsibility both at sector levels, as well as investee company level.

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Our full voting records are available here.

Our fund approach to responsible investment

The investment objective of Kempen Global Sustainable Equity Fund is to offer investors the opportunity to invest in professionally managed long-term portfolio of companies worldwide, while at the same time complying with strict exclusion and sustainability criteria.

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We strive to invest in a portfolio of sustainable companies that has a carbon intensity well below the benchmark. Furthermore, we engage with the most carbon intense companies in our portfolio in order to improve disclosure and policies that should contribute to a reduction in carbon intensity.

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Kempen’s ESG policy is implemented in our fund’s investment process by the following pillars: Exclusion, Integration, Active ownership and Positive Impact.

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Exclusion & Avoidance

In line with the general Kempen policy, the Global Sustainable Equity Fund excludes all companies on the KCM Exclusion- or Avoidance list.

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Companies that ‘Fail’ marked against the criteria of the United Nations Global Compact are excluded.

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Companies scoring MSCI ESG rating of CCC or B are excluded on a comply or explain basis.

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The Global Sustainable Equity Fund also excludes companies based on additional sustainability criteria as listed in the table below.

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More information on our exclusion criteria and thresholds can be found here.

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EXCLUSION CRITERIA KEMPEN (LUX) SUSTAINABLE EUROPEAN SMALL-CAP FUND

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KEMPEN CRITERIA

ADDITIONAL SUSTAINABILITY CRITERIA

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Business Conduct

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x    Human Rights

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x    Labour

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x    Environment

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x    Anti-corruption

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Product Involvement

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x    Controversial Weapons

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x    Tobacco

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x    Adult Entertainment

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x    Alcohol

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x    Animal Welfare & GMO

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x    Gambling

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x    Power Generation Nuclear

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x    Power Generation Carbon Intensive

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x    Thermal Coal

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x    (Un)conventional Oil & Gas Extraction

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x    Weaponry

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ESG integration

In the investment process we assess the ESG profile of a company. We assess each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, strategy, management and disclosure.

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A lower ESG score requires a higher return on capital as used in our valuation model. If ESG risks are deemed too severe, an investment in the company will be avoided and/or existing holdings will be sold.

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ESG opportunities are evaluated too and might be part of the long-term growth rate of the company as used in our valuation model.

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On a quarterly basis, the Kempen Responsible Investment team screens the holdings of the Kempen Global Sustainable Equity Fund and discusses the findings with the portfolio managers.

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Active ownership: Engagement

As active investors we perform comprehensive engagements with our portfolio companies with the objective to unlock value and reduce risk.

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Our engagement process defines clear objectives of which the progress and result is tracked and well documented. If at any stage the company refuses to cooperate, divestment has to be considered.

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In 2018 we engaged on issues such as: remuneration, environmental targets, living wages, privacy and data security, money laundering, bribery and ESG integration. One result was that a company publicly disclosed their animal testing policy, and another was an insurance company integrating ESG in their investment process.

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Active ownership: Voting

Exercising our voting rights is also an essential part of our responsible investment philosophy. ISS provides us with voting recommendations based on our own voting and governance policy. Items are further analyzed on a case by case basis.

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Often, we inform the company about our voting intention ahead of the meeting and, where there is a recommendation to vote against management, we ask the company to clarify their viewpoints. After careful analysis, we form our own opinion and vote accordingly.

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Impact

The Fund creates positive impact by allocating capital to the companies helping to deliver the transition to a more sustainable economy. Our approach results in a higher exposure to the Sustainable Development Goals compared to the MSCI World. Management is incentivized this way to contribute to the transition as they will be rewarded in the financial markets by access to and a lower cost of capital.

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We aim for 50% of the companies to have a direct contribution to the SDGs with their products and services.

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*

Although Kempen Capital Management N.V.’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

ESG Report
Screening MSCI research
Screening MSCI research
UN global impact
Carbon footprint
ESG integration in the investment process
ESG integration in the investment process
Source
disclaimer
Kempen Capital Management N.V. (KCM) is the management company of Kempen Global Sustainable Equity Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. The value of your investment may fluctuate. Past performance provides no guarantee for the future.