August 2022
The Sustainable Dividends Value Fund had a difficult month. Delays in passing on higher costs to customers and fears of a drop in demand due to high inflation caused the price of many shares in the fund to fall. But the general fear of higher interest rates also played a part. We believe that the latter is not justified, as most of the companies in our fund have little or no debt. Despite this, last month’s price appreciation was canceled out again with a return of -8.5% in the month of August. The announcement of significant interest rate hikes is causing uncertainty and fear amongst investors. The prices of large European companies fell by an average of 4.9% (MSCI Europe Index). Mid-sized companies saw a price decline of 6.7% (MSCI Europe Mid Cap Index) and small companies an average 6.9% (MSCI Europe Small Cap Index). The balance sheet ratios of the companies in our fund are strong. Most companies have only modest debt and some even have a net cash position. They therefore have nothing to fear from rising interest rates. This is one of the reasons why we look to the future with confidence in this difficult year. Since its inception in 2016, our fund has now delivered over 52% (+6.6% pa, after fees), versus 36% for the MSCI Europe (+4.7% pa).
Newsletter
The fund
Sustainable Dividends offers an investment fund that invests in a well-diversified portfolio of European companies at the forefront of the sustainability transition. Our focus is on a disciplined investment process, while applying both qualitative and quantitative financial criteria.