Triodos Sustainable Equity Fund

In the healthcare sector, pharmaceuticals company Novo Nordisk (diabetes treatment) and medical technology company Edwards Lifesciences (artificial heart valves) enjoyed strong share price rises in 2015. Triodos Sustainable Equity Fund sold its position in Sonova because of the company’s mediocre prospects. Medtronic from the United States (medical technology) was removed from the investment universe and was also sold. The sub-fund used the proceeds to expand existing positions in the sector.

Breakdown by sector as at December 31, 2015*

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Sector

% of net assets

 

 

*

Source: RBC Investor Services Bank

Consumer Discretionary

27.6

Healthcare

18.2

Information Technology

15.9

Industrials

12.1

Financials

10.5

Consumer Staples

5.1

Telecom

3.9

Materials

2.2

Utilities

2.0

 

 

Breakdown by country as at December 31, 2015*

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Country

% of net assets

 

 

*

Source: RBC Investor Services Bank

United States

47.6

Great Britain

14.3

Germany

5.3

Switzerland

3.8

Japan

3.7

Denmark

3.5

Spain

3.4

Sweden

3.3

Jersey

2.8

Others

9.7

 

 

In the consumer sector, stocks such as Starbucks, Nike and Walt Disney outperformed. Automotive suppliers, including Delphi Automotive and Continental, also rose sharply. Underperformers generally faced company or sector-specific problems. The share price of Chipotle Mexican Grill, for instance, fell sharply when it became known that customers of its restaurants had contracted an e.coli infection. The share price trends of organic food manufacturers disappointed, mainly because of slowing sales growth. In the IT sector, investors displayed a preference for software companies such as Red Hat and Adobe Systems. Equinix from the US made a takeover bid for Telecity Group. The sub-fund sold its position in this company and reinvested the proceeds in Amadeus IT Holding.

Top 10 holdings as at December 31, 2015*

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Name

Country

Sector

% of net assets

 

 

 

 

*

Source: RBC Investor Services Bank

Roche Holding

Switzerland

Healthcare

3.0

Novo Nordisk

Denmark

Healthcare

2.2

Priceline.com

United States

Consumer Discretionary

2.1

Walt Disney

United States

Consumer Discretionary

1.9

Nike

United States

Consumer Discretionary

1.8

Starbucks

United States

Consumer Discretionary

1.7

Time Warner

United States

Consumer Discretionary

1.7

Comcast

United States

Consumer Discretionary

1.7

Edwards Lifesciences

United States

Healthcare

1.7

Vodafone Group

Great Britain

Telecom

1.6

 

 

 

 

Producers focusing on alternative energy (solar and wind) rose sharply. Vestas Wind benefited from a strong order flow and an improvement in its margins and cash flow. Share prices of solar panel manufacturers were volatile, but ended the year higher. An important factor here was the favourable outcome of the Paris climate conference and the tax credit extension for investments in sustainable energy in the US. The sub-fund established a position in Acuity Brands (energy efficient lighting systems).

In the industrials and utility sectors, Chinese water purification companies were in favour with investors. US water company Pentair no longer met the sub-fund’s sustainability criteria and was sold. The proceeds were reinvested in Kubota from Japan as the company is a potential beneficiary of the ongoing mechanisation of Asia’s agricultural sector. In the financial sector the sub-fund sold its position in AON (insurance services), as the company no longer meets the sustainability criteria of the sub-fund. The sub-fund sold its position in Norwegian bank DNB because of its mediocre prospects. The sub-fund added 3i Group from the UK to the portfolio and increased the weight of Svenska Handelsbanken.

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