Lazard Global Sustainable Equity Fund is an actively-managed fund to invest in companies promoting a more sustainable world both in developed and emerging markets. A 4-star Morning star rating and 21.25% return on equity show its strong profitability. However, its portfolio does not primarily contain companies majoring in or striving for sustainability. Overall, it seems the fund focuses more on profitability rather than sustainability. Therefore, I would not recommend this as an investment choice if you desire to contribute to environmental sustainability.
What It’s Made of
The Lazard Global Sustainable Equity Fund contains $266.07 million in assets with 50 holdings as of 31st January 2022. The fund has a 21.25% return on equity on average which is 6.58% higher than MSCI, indicating its higher profitability compared to the market. Out of a current 50 holdings, focused in the US (62.12%), its main holdings and investments focus on technology companies such as Microsoft (5.84%), Thermo Fisher Scientific (3.87%) and TSMC (3.31%). The main equity sectors that it is involved in are Information Technology (30.71%), Health Care (23.33%), Industrials (21.95%) and Financials(7.34%). The lack of holdings in material sectors and zero holdings in energy sectors reveal that the fund slightly deviates from its focus on solving climate change but is more interested in generating profits for investors than making an actual difference to sustainability.
How Is It Made
The Lazard Global Sustainable Equity Fund’s approach to identifying sustainable companies is based on to which extent companies achieve sustainability, financial productivity and responsible operations simultaneously and successfully. Companies they selected must meet three fundamental conditions. Firstly, the company provides products or services that are helping to solve the world’s sustainability challenges. Secondly, this must materially drive either high or improving levels of financial productivity. Finally, the company must be managed responsively from a human capital, natural capital and governance perspective. The selection rule is well rounded, as it not only cares about how effectively a company utilises its capital to generate profits but also considers whether the firm has sound ESG characteristics. However, from the distribution of the fund’s holdings, we can see that there is a serious imbalance among its goals. It seems that the fund is more focusing on the productivity and profitability of firms rather than their ESG and sustainability considerations.
Who Makes It
The Lazard Global Sustainable Equity Fund is managed by four portfolio managers, who have rich investment experiences. Louis Florentin-Lee has been working in the investment industry since 1996, with former co-management of Lazard European Explorer Fund between 2004 and 2010. Jenny Hardy is a research analyst covering the technology sector and has been working in three investment fields since 2011. Jessica Kitty has more than 20-year experience working in the financial industry, majoring in investing in the US. Barnaby Wilson began working in the investment field in 1998. Although all managers have great experience in the financial investment industry, they lack specific experience in terms of ESG investment. The Fund should be managed by managers with richer sustainability-focused professional backgrounds in order to effectively invest in sustainable businesses.
https://www.lazardassetmanagement.com/uk/en_uk/funds/offshore- funds/lazard-global-sustainable-equity-fund/f439/s26/? shareClass=8638
https://www.lazardassetmanagement.com/docs/product/-s267-/ 124883/LazardLazardGlobalSustainableEquityFundCAccGBP- IE00BM952M55_FactSheet_2021-12_en.pdf