Two ethical income winners from pandemic and our latest buys

TL;DR

The Responsible UK Income Fund favors the industrials sector and mid/small cap companies, with a focus on responsible investing.

Transcript

hello today i have with me catherine stanley of the responsible uk income fund catherine thank you for your time today no problem pleasure industrials is the most favored sector in the fund accounting for around a quarter of assets could you explain why you favor that sector and name some stock examples sure so there's a few points to make here so ... Read More

Key Insights

• 👷 The Responsible UK Income Fund is overweight in industrials, particularly construction and support services.
• 🖕 Mid and small cap companies like Timing and Sirius Real Estate have performed well during the COVID-19 period.
• ❓ Greco and Tate and Lyle are recent additions to the fund, highlighting a commitment to energy transition and potential re-rating.

Questions & Answers

Q: Why does the Responsible UK Income Fund favor the industrials sector?

The fund favors industrials due to responsible factors, bottom-up stock picking, and yield requirements. The construction and support services subsectors align with sustainable development, safety, and diverse name criteria.

Q: Can you provide examples of mid/small cap companies that performed well during the COVID-19 period?

Timing, an access component business specializing in energy-efficient housing and safety, has done well. Sirius Real Estate, a German flexible workspace specialist, had strong rent collection and a diversified customer base.

Q: What are the newest names to enter the fund?

The fund has a low turnover rate, but two recent additions are Greco, a power and temperature equipment rental business committed to energy transition, and Tate and Lyle, a sweetener and specialty ingredients business with potential for re-rating.

Q: What factors have driven increased investor interest in responsible investing?

Factors include increased awareness of inequality, a focus on quality and experiences, the Paris climate agreement, government interest in climate change, regulatory obligations, and demographics with younger people showing more interest.

Summary & Key Takeaways

• The Responsible UK Income Fund is structurally underweight in big sectors like oils, miners, tobacco, and beverages, and overweight in sectors like industrials.

• The fund's focus on industrials is driven by responsible factors, bottom-up stock picking, and meeting yield requirements. The construction and support services subsectors are particularly relevant.

• Mid and small cap companies that performed well during the COVID-19 period include Timing, a doors and window furniture business, and Sirius Real Estate, a German flexible workspace and business parks specialist.