The fund is the third to be launched since Smith set up the
company in 2010, following a 36-year career which included a
stint as chief executive of interdealer broker Tullet Prebon.
The move into sustainable investing for Fundsmith, which
currently manages 13.5 billion pounds ($17.84 billion), follows
growing demand from institutions such as pension schemes and
insurance companies to focus on the sustainability of returns.
As well as more common exclusions such as pornography and
tobacco, the Fundsmith Sustainable Equity Fund (FSEF) will also
avoid investing in aerospace, defense, brewers, casinos, gas and
electric utilities, metals and mining, oil and gas, it said.
While increasing numbers of funds are being launched aiming to
pick stocks based on environmental, social and
governance-related characteristics, Fundsmith said it will also
look at policies and practice on research and development,
product innovation, dividend policy and capital investment
"We have long felt that many investors who apply the commonly
used factors to identify sustainable investments do so at the
expense of the long-term economic sustainability of a business,"
"By marrying important sector exclusions with the proven
sustainable investment process of Fundsmith we have shown that
we can deliver superior investment performance."
The launch of the fund follows three years in which the company
used the same process to run money for British charity Comic
Relief, during which it returned an annualized performance 23.9
percent, it said in a statement.
The fund will be open to institutional investors with a minimum
investment of 5 million pounds ($6.61 million) and carry an
annual management fee of 0.9 percent. Smith and partners will
invest more than 10 million pounds into the fund, it said.
The company launched its flagship Fundsmith Equity Fund in 2010
with 25 million pounds in seed money. It has since grown to
total 11.9 billion pounds in assets, much of invested on behalf
of retail investors.
(Reporting by Simon Jessop; editing by Jason Neely)
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