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April 19, 2022

UBAM's meticulous approach is rewarded with 2 gold medals

Both UBAM funds on The Big Exchange have been re-assessed through our impact methodology. Read our summary on how it performed and why they got Gold.

Every year The Big Exchange re-assess funds for their positive impact on people and the planet. The fund manager has to prove that the fund is continuing to walk the talk. We regularly update our assessment and will award new medal ratings for every fund. Every fund re-assessment gets an update for you to find out more.

UBAM funds retain Gold medals following impact reassessment

UBAM Positive Impact Equity Fund and UBAM Positive Impact Emerging Equity Fund have once again received very high scores under the Big Exchange’s rigorous impact methodology. The assessment was conducted independently by responsible investing specialist 3D, part of Square Mile Investment Consulting and Research. As a result, we are proud to award a Gold Medal for both funds.

A meticulous approach to impact investing 

These funds aim to generate a significant measurable social or environmental impact alongside a financial return. UBAM, the asset management arm of Swiss bank UBP, devotes considerable resources to its impact investing strategies.

An Impact Advisory Board and Impact Investment Committee ensure the approach meets stringent criteria. The UBP Impact Advisory Board, made up of external non-investment experts, verifies that sustainability is embedded in the process as well as providing guidance on broader issues surrounding real positive impact. 

The Impact Investment Committee brings together internal professionals who are tasked with creating and evolving UBP’s impact capabilities and incorporating industry best practice in an authentic way. Significantly, this committee has been built from a grass-roots initiative rather than an instruction from above. 

The UBAM investment team worked with the Cambridge Institute for Sustainability Leadership to translate the United Nations Sustainable Development Goals (SDGs) into six investable themes: basic needs; health and well-being; inclusive and fair economies; healthy ecosystems; climate stability; and sustainable communities.

The team screens the universe of potential investment opportunities using their own proprietary system. This measures intensity of a company’s impact in relation to the proportion of research and development spending on solutions, the proportion of sales making a positive impact, uniqueness and leadership in its field, and the potential to have a significant impact on the world. 

In our reassessment, the UBAM funds scored 3 out of 3 for both positive influence and transparency. We found that their levels of engagement and reporting remain of a high standard and their focus on positive impacts for people and planet is impressive. An annual impact report is provided which explains the outcomes clearly. 

Corporate engagement is divided into three categories (investigation, guidance, and measurement), although interactions will often address more than one at a time. Whilst investigation covers a broad range of topics, from sustainability initiatives to financials, measurement focuses on relevant non-financial outcomes, which are essential for evaluating a company’s positive impact. 

Whilst these two funds share a common philosophy and process, they have different geographical exposures. Please bear in mind that whilst some Emerging Markets may offer stronger growth prospects, they can also be more volatile than their developed counterparts and as such may be more suited to investors with a longer time horizon.

We have outlined below some of the key attributes of each fund below to help you consider whether they may be worthy of consideration for your portfolio.

UBAM Positive Impact Equity Fund

The managers build a concentrated portfolio of 35-45 stocks which they consider to be high quality and in which they have strong conviction. They believe that businesses tackling challenges such as resource scarcity, climate change and poverty are best placed to produce superior growth and profitability over the long term.

Around half of this fund is invested in companies in Continental Europe, with 11% in the Netherlands, 7% in Denmark and 6% in France being the largest country exposures in the region. A further 23% is allocated to the UK and 8% to the US. The main industry exposures are industrials at 38% of the portfolio, materials at 18% and healthcare at 11%. 1

The greatest alignment is to SDG 12 (Responsible Consumption and Production), which represents 23% of the portfolio whilst SDG 3 (Good Health and Wellbeing) and SDG 2 (Zero Hunger) account for 13% and 9% respectively.2  

You may be interested to know that the fund also aligns with SDG 16, Peace, Justice & Strong Institutions, by donating a portion of its management fee to charities supporting this goal. Overall, we estimate that 93% of this fund is invested in positive solutions.2

Impact Stock Example - Befesa

This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.

Befesa collects and recycles hazardous industrial waste from steel and aluminium manufacturers, recovering valuable materials and reintroducing them into the production process. By recycling, these materials can be reused several times and the consumption of natural resources is reduced. This process plays a key role in the transition to a circular economy as well as reducing production costs. Befesa analyses its own activities to minimise impact on the environment (and reduce their carbon footprint) through using technologies which prevent, mitigate, or rectify any such impact.  The firm places great emphasis on its responsibilities to society.

UBAM Positive Impact Emerging Equity Fund

The particular focus of this fund is on companies which address the lack of access to basic services and infrastructure in Emerging Markets, as well as those solving environmental problems, which can be considerable in this part of the world. 

The fund managers seek innovative companies which are driving positive change. Geographically the biggest country exposures are a 28% weighting in China, 18% in Taiwan and 9% in Hong Kong. The main industry exposures are industrials at 20%, Consumer Discretionary at 17% and Technology at 16% of the portfolio.

The greatest alignment to the SDGs can be seen in the 15% of the portfolio aligned with SDG 7 (Affordable and Clean Energy) with a further 13% mapped to SDG 3 (Good Health and Well-Being) and 9% to SDG 9 (Industry, Innovation, and Infrastructure,) respectively. We estimate that a commendable 76% of the fund is invested in positive solutions.2

The clearly defined strategy is one of the reasons why this is the only Emerging Markets fund on the Big Exchange to receive a Gold Medal to date.

Impact Stock Example- CIPLA Ltd

This is where we take a company that the fund invests in and tell you more about what it does to show you how your money can count for more.

Cipla is an Indian pharmaceuticals company with strengths in respiratory, anti-retroviral, urology, cardiology, and Central Nervous System (CNS) treatments. The firm was founded with a mission to make healthcare accessible for all and, to this day, it continues to provide affordable drugs for low-income countries through its Cipla Global Access programme. Indeed, it was one of the first companies to offer triple anti-retroviral therapy for HIV/AIDS in Africa at less than a dollar a day. Cipla has also been at the forefront in fighting pandemics, including Covid-19. It’s deep-rooted community links, make Cipla a partner of choice for global health bodies. The Cipla Foundation is dedicated to delivering initiatives in health, education, environmental sustainability & disaster response. 

1 Fund factsheets @end February 2022

2 Big Exchange Impact Assessment March 2022

Please remember that when investing, making money is not guaranteed and your capital is at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’s circumstances and may be subject to change. 

The Big Exchange (TBF) Limited is a wholly owned subsidiary of The Big Exchange Limited. The Big Exchange (TBF) Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 574048). 

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