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Liontrust ESG trust set for launch next week

10% of the management fees will go towards increasing ESG investment opportunities

Liontrust, the fund manager, is set to launch its investment trust next week, targeted at companies in the area of ESG (Environmental, Social, and Governance).

The “Liontrust ESG Trust” will have a portfolio of around 25-30 companies from all over the world.

The ESG investment trust is a more high octane version of Liontrust’s existing global fund, and will invest in ways which make it riskier, but with the potential for greater returns in the long-run, the company said.

The portfolio will be managed by Simon Clements, Chris Foster and Peter Michaels, who are all members of Liontrust’s sustainable investment team.

“The trust will make use of gearing straight from the off, and borrowing is expected to be around 10%, which should help to turbo charge long term returns in a rising market, but also accentuate drawdowns along the way. The investment trust will also invest in some smaller companies opportunities the fund can’t access, which again opens the door for a performance kicker, but at the cost of added risk,” Liontrust said in a statement.

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The trust is also donating 10% of the investment management fee to projects that explore the potential for investment instruments relating to four Sustainable Development Goals that are “hard to invest in”.

Laith Khalaf, financial analyst at AJ Bell, commented on the timing of the launch, as well as some other advantages:

“A couple of high profile investment trust launches failed to get off the ground last year, but Liontrust has a few aces up its sleeve. The vaccine roll-out has delivered a significant boost to investor confidence, and Liontrust is launching this trust in the ESG space, where we know there is a lot of demand right now. Liontrust already has a well-established ESG range and the new investment trust will be run by the same team who manage the longstanding Sustainable Futures franchise, along similar lines to their existing Global Growth fund,” Khalaf said.

“The Liontrust sustainable investment team is one of the oldest in the business, having started life in 2001 at Aviva. Experience counts for nothing if it doesn’t deliver performance though, and the Sustainable Future Global Growth fund has shot the lights out on that front, ranking 15th out of 194 funds in the Global sector over ten years, with a total return of 310%, compared to 224% from the MSCI World Index*.”

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