The Candriam Sustainable Global Equity Fund is a global core international equity fund. The fund invests in companies that rank best of sector with regard to their social, environmental, employment and ethical economic policies are considered.
Following a robust rally for stocks in the first half of 2023, the third quarter offered something of a reality check. On one hand, developed market equities fell by 3.4% over the quarter, taking year-to-date returns lower to 11.6%. On the other hand, a sell-off in global bond markets was partly to blame for the pressure on risk assets, with the global aggregate bond benchmark falling by 3.6% in the third quarter. As bonds and stocks fell simultaneously, commodities were the notable outperformer, returning 4.7% over the quarter, echoing the market dynamics of 2022. Headwinds to the global economy posed by tight oil markets also caught the attention of investors, with Brent Crude oil prices rising by 28% over the quarter. In sum, the smooth sailing for risk assets in the first half of the year looked unlikely to continue indefinitely in the face of a slowing global economy. Despite the resilience witnessed in economic activity to date, recession risks remain elevated and not all parts of the market appear appropriately priced for such a scenario.
Key Stock Contributors and Detractors
During the third quarter, at a stock level, the Fund derived positive performance from Novo Nordisk, Splunk and Automatic Data Processing.
Novo Nordisk is an overweight position in Health Care due to its good scores on Quality, Growth and Sentiment. Novo Nordisk develops, produces, and markets pharmaceutical products. The company focuses on diabetes care and offers insulin delivery systems and other diabetes products. Novo Nordisk also works in areas such as haemostasis management, growth disorders, and hormone replacement therapy. The company offers educational and training materials. This quarter, shares jumped over 19% to hit a fresh record high after a study of its blockbuster obesity medicine Wegovy found the drug reduced the risk of heart attacks and strokes. During this Q3, Novo Nordisk was up by 17.2% versus the MSCI World. Candriam’s ESG rating is 2.
Splunk is an overweight position in Information Technology, due to its good scores on Sentiment and Value. Splunk develops web-based application software. The Company provides software that collects and analyses machine data generated by websites, applications, servers, networks, and mobile devices. In Q3, the Splunk share price increased by 38.5%. The first meaningful increase was in August, after the infrastructure-software company reported second-quarter revenue that beat estimates and raised its fullyear forecast beyond expectations, then in September, after Cisco Systems agreed to buy Splunk. During this Q3, Splunk was up by 41.2% versus the MSCI World. Candriam’s ESG rating is 4.
Automatic Data Processing is an overweight position in Industrials due to its good score on Quality. Automatic Data Processing is a global provider of business outsourcing solutions. The Company’s services include a wide range of human resource, payroll, tax, and benefits administration solutions.
Automatic Data also provides solutions to auto, truck, motorcycle, marine, and recreational vehicle dealers. ADP shares saw a 9.5% increase in Q3, after reporting fourth quarter adjusted earnings per share that beat the consensus estimate. During this Q3, Automatic Data Processing was up by 13.4% versus the MSCI World. Candriam’s ESG rating is 2.
Three stocks that contributed negatively to excess return during the period included Insulet, Adyen and Vir Biotechnology
What is Candriam Sustainable Global Equity Candriam Sustainable Global Equity is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Large Responsible Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Candriam Sustainable Global Equity has Assets Under Management of 55.36 M with a management fee of 0.87%, a performance fee of 0.00% and a buy/sell spread fee of 0.3%.
How has the investment product performed recently?
The recent investment performance of the investment product shows that the Candriam Sustainable Global Equity has returned 2.24% in the last month. The previous three years have returned 11.02% annualised and 11.69% each year since inception, which is when the Candriam Sustainable Global Equity first started.
How is risk measured in this investment product?
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Candriam Sustainable Global Equity first started, the Sharpe ratio is 0.75 with an annualised volatility of 11.69%. The maximum drawdown of the investment product in the last 12 months is -5.63% and -18.09% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
What is the relative performance of the investment product?
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Candriam Sustainable Global Equity has a 12-month excess return when compared to the Foreign Equity - Large Responsible Index of -0.53% and -0.91% since inception.
Does the investment product produce Alpha over its Peers?
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Candriam Sustainable Global Equity has produced Alpha over the Foreign Equity - Large Responsible Index of 0.06% in the last 12 months and -0.07% since inception.
What are similar investment products?
For a full list of investment products in the Foreign Equity - Large Responsible Index category, you can click here for the Peer Investment Report.
What level of diversification will Candriam Sustainable Global Equity provide?
Candriam Sustainable Global Equity has a correlation coefficient of 0.98 and a beta of 0.93 when compared to the Foreign Equity - Large Responsible Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
How do I compare the investment product with its peers?
For a full quantitative report on Candriam Sustainable Global Equity and its peer investments, you can click here for the Peer Investment Report.
How do I compare the Candriam Sustainable Global Equity with the Developed -World Index?
For a full quantitative report on Candriam Sustainable Global Equity compared to the Developed -World Index, you can click here.
Can I sort and compare the Candriam Sustainable Global Equity to do my own analysis?
To sort and compare the Candriam Sustainable Global Equity financial metrics, please refer to the table above.
Has the Candriam Sustainable Global Equity been independently verified by SMSF Mate?
This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.
How can I invest in Candriam Sustainable Global Equity?
If you or your self managed super fund would like to invest in the Candriam Sustainable Global Equity please contact Grosvenor Place, Level 27, 225 George Street,Sydney NSW 2000 via phone +61 02 9259 0200 or via email contactus@ausbil.com.au.
How do I get in contact with the Candriam Sustainable Global Equity?
If you would like to get in contact with the Candriam Sustainable Global Equity manager, please call +61 02 9259 0200.
Comments from SMSF Mates
SMSF Mate does not receive commissions or kickbacks from the Candriam Sustainable Global Equity. All data and commentary for this fund is provided free of charge for our readers general information.
Performance Commentary - August 31, 2023 In August, market volatility increased, reflecting renewed stress in the Chinese property market, weak macroeconomic data out of China and an increase in sovereign bond yields. Given this backdrop, global stocks sold-off and the MSCI All Country World Index declined 2.8% over the month in US dollar terms. Developed markets outperformed emerging markets with a loss of 2.3% versus a loss of 6.1% respectively. Yields on the 10-year US Treasury increased by 16 basis points to 4.1%. Even though inflation pressures are receding, risks have not entirely disappeared, and central banks will likely have to maintain restrictive policies beyond 2023.
Key Stock Contributors and Detractors
During the month, at a stock level, the Portfolio derived positive performance from Novo Nordisk, Eli Lilly and Company and Arista Networks.
Novo Nordisk is an overweight position in Health Care due to its good scores on Quality, Growth and Sentiment. The company develops, produces, and markets pharmaceutical products. It focuses on diabetes care and offers insulin delivery systems and other diabetes products. Novo Nordisk also works in areas such as haemostatis management, growth disorders and hormone replacement therapy. The company offers educational and training materials. Novo Nordisk shares were up 25.5% following a big jump after a study of its blockbuster obesity medicine Wegovy found the drug reduced the risk of heart attacks and strokes. During this month, Novo Nordisk was up 17.8% versus MSCI World. Candriam’s ESG rating is 2.
Eli Lilly and Company is an overweight position in Health Care, due to its good scores on Quality and Growth. It discovers, develops, manufactures and sells pharmaceutical products for humans and animals. The company products are sold in countries around the world. Eli Lilly products include neuroscience, endocrine, anti-infectives, cardiovascular agents, oncology and animal health products. In August, the share price jumped by 21% after the drugmaker boosted its revenue guidance for the full year above the average analyst estimate. During this month, Eli Lilly and Company was up 24.5% versus MSCI World. Candriam’s ESG rating is 3.
Arista Networks is an overweight position in Information Technology due to its good scores on Quality, Sentiment and Growth. The company offers ethernet switches, pass-through cards, transceivers and enhanced operating systems. Arista Networks also provides host adapter solutions and networking services. Arista Networks markets its products worldwide. This month, Arista shares were up 26% after the communications equipment company reported second-quarter results that beat expectations and gave a revenue forecast that is above the consensus analyst estimate. During this month, Arista Networks was up 28.2% versus MSCI World. Candriam’s ESG rating is 5.
Three stocks that contributed negatively to excess return during the period included Adyen, Insulet and Fortinet.
Adyen is an overweight position in Financials due to its good score on Quality and Growth. The company offers a platform that enables merchants and businesses to process payments online, mobile, and point-of-sale systems with payment methods including card schemes, mobile wallets, and other local methods. In August, Adyen’s share price dropped by over 54% after the payment firm’s processing volume, revenue growth and profitability all missed estimates in the first half. The miss on most lines prompted analyst concerns that competition over pricing is heating up, causing the company to keep a high level of spending and sacrifice margins as a result. During this month, Adyen NV was down almost 52.6% versus the MSCI World. Candriam’s ESG rating is 5.
Insulet is an overweight position in Health Care due to good scores on Growth, Sentiment and Volatility. The company develops, manufactures, and markets an insulin infusion system for people with insulin-dependent diabetes. Insulet
markets its products in the United Kingdom, Canada and United States. Insulet shares declined by over 30%, along with all medicaldevice makers drug companies, following obesity drug results as these companies may see short-term impact on certain procedures such as bariatrics. During this month, Insulet Corporation was down almost 28.4% versus the MSCI World. Candriam’s ESG rating is 4.
Fortinet is an overweight position in Information Technology due to a good score on Quality. The company offers network security appliances, software and subscription services. Fortinet systems integrate the industry’s broadest suite of security technologies, including firewall, VPN, antivirus, intrusion prevention (IPS), web filtering, antispam and traffic shaping. Fortinet shares dropped by 21% in August after the cybersecurity firm cut its revenue and billings guidance for the year, while reporting what analysts described as a weak second quarter. The warning fuelled concerns over whether this represents the start of a more prolonged slowdown in demand. During the month, Fortinet was down almost 20.2% versus the MSCI World. Candriam’s ESG rating is 4
Performance Commentary - June 30, 2023 Key Stock Contributors and Detractors
During the second quarter, at a stock level, the Fund derived positive performance from Owens Corning, Eli Lilly and Company, and Microsoft.
Owens Corning is an overweight position in Industrials, due to its good score on Value. Owens Corning (OC) produces residential and commercial building materials, glass-fiber reinforcements, and engineered materials for composite systems. This quarter, the share price jumped by 35%. OC reported Q1 revenues and EBITDA ahead of street expectations. OC returned $183m to shareholders in Q1 through dividends and share repurchases. During this Q2, Owens Corning was up by 29.2% versus the MSCI World. Candriam’s ESG rating is 3.
Eli Lilly and Company is an overweight position in Health Care, due to its good score on Quality. Eli Lilly and Company discovers, develops, manufactures, and sells pharmaceutical products for humans and animals. This quarter, the share price outperformed and was up 33%, after the pharmaceutical company reported first-quarter revenue that beat expectations, with sales for its Mounjaro antidiabetic medication notably above the consensus estimate. It also raised its forecast. During this Q2, Eli Lilly and Company was up by 29.9% versus the MSCI World. Candriam’s ESG rating is 3.
Microsoft is an overweight position in Information Technology due to its good score on Quality and Sentiment. Microsoft operates as a software company. This quarter, the share price outperformed and increased by 17%, after the software company’s third-quarter results beat expectations. Analysts highlighted strength in the company’s Azure cloud business and were optimistic about the overall resiliency of the business, leading multiple analysts to upgrade the stock. MSFT shares also have been surfing on the AI, Tech and ChatGPT wave. During this Q2, Microsoft Corporation was up by 11.4% versus the MSCI World. Candriam’s ESG rating is 3.
Three stocks that contributed negatively to excess return during the period included Tesla, Estee Lauder and Agilent Technologies.
Tesla is an underweight position in Consumer Discretionary Services despite its good score on Value and Quality. Tesla operates as a multinational automotive and clean energy company. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers. This quarter, the share price performance was 31%. Tesla’s discounts have been dramatic both in scale and time span — it’s dropped the starting price of the Model Y by 29% in just over three months. While Tesla remains the top seller of EVs and is in the rare position of manufacturing them profitably at scale, its growth has slowed dramatically as borrowing costs rise and more automakers roll out competitive plug-in models. During Q2, Tesla was up almost 19.2% versus the MSCI World. Candriam’s ESG rating is 3.
Performance Commentary - May 31, 2023 This month saw unemployment at or near historic lows in the eurozone (6.5%), UK (3.9%) and the US (3.4%), with wages are growing strongly. After the end of zero-COVIF and a strong fi rst quarter, Chinese macro data for April indicated a slowdown in activity. Imports dropped 7.9% and industrial production grew only 5.8% year-on-year. Chinese equities underperformed the MSCI Asia exJapan Index, which returned -1.8%. Commodity markets experienced some weakness. Oil ended the month down about 40% from the same time last year. Price declines in industrial metals were also particularly pronounced in May, which is likely a refl ection of lacklustre global demand for goods, and a weakening of commodity-intensive activity in China. However, core infl ation remained stubbornly high in Europe and the US ,and the prospect of sustained strong wage growth has fueled investor concerns that central banks could tighten further, leaving peak policy rates higher than initially expected.
Key Stock Contributors and Detractors
During the month, at a stock level, the Fund derived positive performance from Twilio, ServiceNow and from Alphabet.
Twilio is an overweight position in Information Technology due to its goodServiceNow is an overweight position in Information Technology, due to its good score on Volatility and Value. ServiceNow provides enterprise information technology (IT) management software. The Company designs, develops, and markets a cloud computing platform to help companies manage digital workfl ows for enterprise operations. In May, shares jumped by 22%. This month, ServiceNow announced their fi rst-ever buyback program of $1.5bn.
Last month, ServiceNow reported stronger-than-expected quarterly results and raised its full-year guidance for subscription revenues. NOW also benefi ts from the AI software run. ServiceNow said it would invest $1B in its venture arm by 2026 to back AI and automation startups. This month, ServiceNow was up by 19.5% versus the MSCI World. Candriam’s ESG rating is 4.
Alphabet is an overweight position in Communication Services due to its good score on Quality and Value. Alphabet operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce and hardware products. This month, Alphabet’s share price increased by 17% after Google unveiled its latest artifi cial intelligence tools and launched new hardware at its annual developer conference. Market is optimistic about the speed with which Google incorporates AI into its products and services. This month, Alphabet was up by 15.4% versus the MSCI World. Candriam’s ESG rating is 5.
Three stocks that contributed negatively to excess return during the period included Estee Lauder, Vodafone and Incyte.
score on Value. Twilio develops and publishes Internet infrastructure solutions. The Company offers a cloud computing platform that allow web developers to integrate phone calls, internet protocol voice communications, and text messages into web, mobile, and phone applications. Twilio serves customers worldwide. Twilio’s share price performance was extremely strong this month, up 34%, after The Information reported that activist investor Legion Partners had met with the communication software company’s board of directors and managers to suggest changes to the board. Analysts said the likelihood of more activist pressure after expiration of super-voting rights for Class B shareholders, could be positive for the stock. During this month, Twilio was up by 33.3% versus the MSCI World. Candriam’s ESG rating is 4.
Performance Commentary - April 30, 2023 Economic data showed that April was a positive month for the global economy with growth remaining remarkably resilient in the face of higher interest rates. US, euro zone, and UK Purchasing Managers Index (PMI) surveys all beat expectations, and China’s Q1 GDP print was also stronger than expected. Falling energy prices helped bring headline inflation down in the major developed economies with the contribution from energy turning negative in the US and the Euro Zone. Equity markets continued their rally and have now broadly recovered from March’s tumult. While near-term recessionary risk seems to have receded somewhat, the closure of another US financial institution at the end of April highlights that the cumulative impact of central bank tightening has still not been fully felt by developed economies.
Key Stock Contributors and Detractors
During the month, at a stock level, the Fund derived positive performance from Eli Lilly and Company, Owens Corming and from Novartis AG.
Eli Lilly and Company is an overweight position in Health Care, due to its good score on Growth and Sentiment. Eli Lilly discovers, develops, manufactures, and sells pharmaceutical products for humans and animals. In April, Lily’s shares gained +18% after the pharmaceutical company reported first-quarter revenue that beat expectations, with sales for its Mounjaro antidiabetic medication notably above the consensus estimate. It also raised its forecast. During this month, Eli Lilly and Company was up by 13.5% versus the MSCI World. Candriam’s ESG rating is 3.
Owens Corming is an overweight position in Industrials, due to its good score on Value. Owens Corning produces residential and commercial building materials, glass-fiber reinforcements, and engineered materials for composite systems. The Company offers its products globally to various industries. Shares increased by 11% in April. The company reported EPS and sales above estimates. First-quarter FY23 net sales inched down by 0.6% yearover-year to $2.33 billion, beating the consensus of $2.22 billion. During this month, Owens Corming was up by 9.7% versus the MSCI World. Candriam’s ESG rating is 3.
Performance Commentary - March 31, 2023 Key Stock Contributors and Detractors
During the quarter, at a stock level, the Fund derived positive performance from Tesla, Arista Networks and from MercadoLibre.
Tesla is an overweight position in Consumer Discretionary, due to its good score on Growth and Sentiment. Tesla operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. Tesla owns its sales and service network and sells electric power train components to other automobile manufacturers. Year to date, shares gained over 70% from their lows touch in early January. The latest boost is coming from the upbeat fourth-quarter results and production outlook, as well as the news that the company has secured a $5 billion revolving credit facility with banks. During this quarter, Tesla was up by 60% versus the MSCI World. Candriam’s ESG rating is 3.
Arista Networks is an overweight position in Information Technology due to its good score on Growth and Quality. Arista Networks provides cloud networking solutions for data centres and computer environments. The Company offers ethernet switches, pass-through cards, transceivers, and enhanced operating systems. Arista Networks also provides host adapter solutions and networking services. In Q1, shares gained 30% versus the MSCI World, gaining from the revamp in the cloud profitable tech. Candriam’s ESG rating is 5.
MercadoLibre is an overweight position in Consumer Discretionary due to its good score on Volatility and Value. MercadoLibre operates an online trading site for the Latin American markets. The Company’s website allows businesses and individuals to list items, conduct sales, and purchases online in either a fixed-price and auction format. MercadoLibre offers classified advertisements for motor vehicles, vessels, aircraft, and real estate, as well as online payment services. During this quarter, MercadoLibre was up by 48% versus the MSCI World. Candriam’s ESG rating is 5.
Three stocks that contributed negatively to excess return during the period included Comerica, Centene Corporation and UnitedHealth Group Incorporated.
Comerica is an overweight position in Financials due to its good score on Sentiment and Growth. Comerica is the holding company for business, individual, and investment banks with operations in the United States, Canada, and Mexico. The Company subsidiaries provides services such as corporate banking, international finance, treasury management, community and private banking, small business and individual lending, investment services, and institutional trust. Shares went down 35% this quarter. In January, shares soared first after 4Q profit and net interest income that beat expectations. However, investors rushed to reduce exposure to the banking industry after seeing equity stakes wiped out at Silicon Valley Bank and Signature Bank. During this quarter, Comerica was down almost 42% versus the MSCI World. Candriam’s ESG rating is 4.
Performance Commentary - February 28, 2023 Key Stock Contributors and Detractors
During the month, at a stock level, the Fund derived positive performance from Lantheus Holdings, W.W. Grainger and from Tesla.
Lantheus Holdings is an overweight position in Health Care due to a good score on Growth. Lantheus Holdings develops, manufactures, sells and distributes diagnostic medical imaging agents and products. The Company offers imaging agents and products that assist clinicians in the diagnosis of cardiovascular and other diseases. The stock jumped 26% in February after the diagnostics company forecast adjusted earnings per share for the first quarter and for the year that beat the average analyst estimate. During the month, Lantheus Holdings was up by 31% versus the MSCI World. Candriam’s ESG rating is 3.
W.W. Grainger is an overweight position in Industrial due to good scores on Quality and Volatility. W.W. Grainger distributes maintenance, repair, and operating supplies and related information to the commercial, industrial, contractor and institutional markets in North America. The stock price in February rose by 12% to touch a record high after the industrial distributor’s full-year profit, revenue and margin forecasts all topped expectations. During the month, W.W Grainger was up by 16.1% versus the MSCI World. Candriam’s ESG rating is 4.
Tesla is an overweight position in Consumer Discretionary due to good scores on Quality and Sentiment. Tesla operates as a multinational automotive and clean energy company. The Company designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services. In February, the share price increased by 13%. The latest boost is coming from the upbeat fourth-quarter results and production outlook, the news that the company has secured a $5 billion revolving credit facility with banks, the potential volume impact by the sale price decrease for Model 3, as well as the opening of new facilities to ramp-up production. During the month, Tesla was up by 21.1% versus the MSCI World. Candriam’s ESG rating is 3.
Performance Commentary - January 31, 2023 Stock markets had a strong start to the year. Developed market equities rose 6% while emerging market stocks performed even better, up 9%. The relatively mild winter has defused the energy crisis in Europe and reduced the risk of a deep winter recession. At the end of January, gas storage in the European Union (EU) was around three-quarters full, compared to only around 35% at the same time last year. The average purchase price for natural gas in January was also about 55% lower than the average price in the second half of 2022. The surprisingly quick end to the zero-Covid policy in China has raised expectations that the Chinese economy will experience a strong recovery in the first half of 2023, which should benefit both China and its trading partners in the region. In line with the experiences of Europe and the US, there is a considerable amount of excess savings and pent-up consumer demand in China due to the numerous lockdowns of the past years. December 2022 inflation readings in the US and eurozone showed slowing inflation, which strengthened market hopes that central banks can end their hiking cycles soon.
Key Stock Contributors and Detractors
During the month, at a stock level, the Fund derived positive performance from Mercado Libre, Tesla and from United Rental.
Mercado Libre is an overweight position in Consumer Discretionary due to a good score on Value. Mercado Libre is an online trading site for the Latin American markets. The Company’s website allows businesses and individuals to list items, conduct sales, and purchases online in either a fixed-price and auction format. In January, the stock jumped by nearly 40% on the back of lower interest rates hikes and a strong economic outlook. The December labour market report showed stronger than expected job gains and a fall in the unemployment rate to 3.5%, matching its 53-year low. Also, inflation was dragged lower by falling energy and vehicle prices, lower health insurance rates and lower airline fares. During this month, Mercado Libre was up by 32.5% versus the MSCI World. Candriam’s ESG rating is 5.
Tesla is an overweight position in Consumer Discretionary due to a good score on Growth and Sentiment. Tesla operates as a multinational automotive and clean energy company. Tesla’s shares jumped by 60% in January. The latest boost is coming from the upbeat fourth-quarter results and production outlook, as well as the news that the company has secured a $5 billion revolving credit facility with banks. Also, Tesla has cut pricing, and this should lead to taking market share over other OEMs, notably in Europe. During this month, Tesla was up by 33.5% versus the MSCI World. Candriam’s ESG rating is 3.
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