Royal London Sustainable Leaders Trust C Acc

March 2026

Overview

The investment objective is to achieve capital growth over the medium term (3-5 years) by investing at least 80% in the shares of UK companies that the managers deem to be making a positive contribution to society and that adhere to RLAM's ethical and sustainable investment policy.

The strategy has tended to focus on larger UK companies rather than be invested across the market cap spectrum which provides an element of differentiation to other impact/sustainable peers. In addition, Mr Fox will invest selectively in overseas stocks where they adhere to his investment criteria which broadens the opportunity set available to him and enhances portfolio diversification.

Square Mile’s Expected Outcome

We believe that the fund should be able to outperform the FTSE All Share Index by 2% per annum over at least a five year rolling period.

Square Mile’s Opinion

Mike Fox is a pioneer of investing responsibly within an investment house with a long and deep commitment to this type of approach. The fund's underlying philosophy and process, which the sustainable equities team applies across all its mandates, has a clear focus on investing in high quality companies that are helping towards a more sustainable future, but also those that it believes can generate strong financial returns. The long-term approach is disciplined and risk averse in nature, with the manager looking to benefit from market inefficiencies and thus informational advantages arising from superior sustainability attributes. Given the strict sustainability framework, there are certain avoidance criteria in place. This means that the fund is likely to be absent from some sectors and areas of the market, such as tobacco, energy and other capital heavy industries. Therefore, we would note that this strategy has the propensity to lag the market particularly when more cyclically sensitive stocks are leading the way. That said, the consistency of returns and focus on protecting capital during more troubled times, should compound into a rewarding investment for investors over the long term.

The strategy's lead manager, Mike Fox, continues to be ably supported by a highly collegiate and stable Sustainable Investment (SI) team, which he heads, at Royal London Asset Management (RLAM). We would highlight that there is a significant resource dedicated to sustainable investing at RLAM, which is to be expected given their long heritage and strong pedigree in this space.

Overall, we believe this is a very solid offering that is managed by a highly experienced and passionate manager within a well-resourced team, and is one that seeks to achieve its performance aspirations of generating strong risk adjusted returns by investing in a portfolio of high-quality companies that are contributing to a more sustainable future.

Fund Manager’s Formal Objective

The Fund's financial objective is to achieve capital growth over the medium term, which should be considered as a period of 3-5 years, and to outperform the FTSE All-Share Index (the "Index") over a rolling 5-year periods. The Fund's sustainability objective is to invest in companies that make a positive contribution to one or more of the "Sustainability Themes" (Clean, Healthy, Safe, Inclusive), through their products or services as determined by the Investment Adviser using its "Sustainability Standard"

Outcome: Capital Accumulation	Domicile: UK
Active/Passive: Active	Benchmark: FTSE All Share
Asset Class: Equity	IA Sector: IA UK All Companies
Yield: 1.59%	Fund size: £2,659M
Fund Manager: George Crowdy, Mike Fox, Sebastian Begulein	Distribution Pay Date: January, July
Fund Price: 3.6 Pounds	Dividend Frequency: Semi-annual
Currency of Share Class: GBP	Share Class Launch Date: 04/12/2012
NAV: 3.6 Pounds	Year end: 31/05/2025
Discount/Premium: 0.00%	Gearing: -
Permission to distribute from Capital: -	Fees charged: -

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Royal London Sustainable Leaders Trust C Acc

Asset Manager Overview

Royal London Asset Management (RLAM) is part of the Royal London Group which is the UK's largest mutual pension and investment provider. Established in 1988, it manages c.£181 billion in assets (as at end June 2025). The Sustainable Leaders fund was previously a Co-op Asset Management (COAM) fund but became a Royal London fund when RLAM bought COAM in 2013. Mr Fox is head of the sustainable equities team and has managed the fund since 2003.

Fund Manager/Team Overview

Mike Fox was appointed as manager of this fund in November 2003, and is ably supported by a highly collegiate and stable SI team, which he heads, at RLAM. There have been few changes to the composition of the team over recent years, with additional joiners augmenting what has proved to be stable resource. We would highlight that there is a significant resource dedicated to sustainable investing at RLAM. The sustainable equities team number's nine, with an additional seven in sustainable credit and 17 in the wider responsible investment team. The external advisory committee, which is another layer of due diligence, challenge and advice comprises of four personnel. Although this fund has four named managers, the portfolio construction aspect of the process lies firmly with Mr Fox, and therefore, within the given investment parameters, it is at his discretion as to the weightings of the respective holdings.

Investment Philosophy & Process Overview

The SI team's research approach combines financial analysis and ESG analysis. The team only offers sustainable funds i.e. it does not have a non-sustainable range. The belief of the team is that the sustainability of a business will drive its financials providing that the business is fundamentally sound. Mr Fox, architect of the process, believes that a good process gives you the right information and allows you to make better judgements. He also believes that the process should be responsive to change and be able to evolve. Unlike many older 'SRI' or 'ethical' funds, the investment process here is based more around positive screening than negative exclusions, although there are a number of hurdles for a business to get over before positive characteristics are assessed. Stocks held in the portfolio generally will be having a positive benefit on society and/or the environment in some way and will be showing leadership in their field. Again, unlike some traditional 'ethical or dark green' funds the portfolio will hold a number of larger businesses which are leaders in their field. This is based on the premise that really only larger companies can influence change.

The team understands that investing sustainably is subjective and it will mean different things to each investor, therefore, they keep the approach fluid and adaptable. The team members embrace the subjective nature of this method of investing and adapt to the times. Their success on the fund (and the range) historically has partly been down to their adaptability. The fund and approach might be considered 'lighter green' than many others in the market, but we would stress that there remains a high hurdle rate for inclusion. Should a business experience problems with its ESG credentials then this would be assessed in a similar way to the financial concerns of a company. There are a small number of negative screens which includes companies that are likely to be exposed to human rights abuses, tobacco and armaments manufacture, products which involve experiments on animals, except for those conducted for the benefit of human or animal health, and the generation of nuclear power. The fund also avoids investments in companies which derive a material proportion of their business from animal fur products, pornography, irresponsible gambling, irresponsible drinking and worker exploitation or exploitative consumer practices. Finally, companies are avoided that have unacceptable corporate governance and mismanage social, ethical and environmental risk.

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Royal London Sustainable Leaders Trust C Acc

ESG Integration

Asset Manager ESG Integration

RLAM has been a signatory to the United Nations Principles for Responsible Investment (PRI) since 2008. Following its most recent assessment, the firm achieved a score of four out of five. It is also a signatory to the UK Stewardship Code.

Following RLAM's acquisition and subsequent integration of the Co-operative's life and savings business, the combined group is now guided by the policies and principles set out in its Stewardship and Responsible Investment Statement. This is reviewed annually and published on the firm's website. These policies are overseen by RLAM's Responsible Investment (RI) team, headed by Ashley Hamilton-Claxton. RLAM has recently undertaken a high-profile ExCo strategic review of its ESG operations and has recently introduced several new initiatives.

RLAM's RI team is growing considerably in response to the firm's aspiration of ensuring that all fund managers and analysts across the different asset classes have the tools available to integrate ESG analysis into their investment processes. The RI team is now augmented by an ESG “Academy” which trains and directs ESG talent throughout the business. Additionally, whereas RLAM has been largely drawing upon external research providers (including, MSCI ESG Ratings, TruCost and RepRisk) to enhance its internal analysis, it has now introduced two substantive internal analytical systems. Its ESG Dashboard provides a company level scoring system for investment teams to use and its Power BI system which draws ESG data into specific fund aggregates. These are very robust initiatives to standardise and increases the accessibility of ESG analysis across the firm.

RLAM has a considerable pedigree in corporate governance, active ownership and stewardship which it sees as being fundamental to protecting the long-term value of its investee companies. It is also committed to Net Zero engagement, climate transition and carbon reporting. Its strong representative approach to broader ESG advocacy in the financial services marketplace is also to be commended.

Fund ESG Integration

ESG factors are firmly embedded in to the SI team's process and it assesses these factors alongside financial factors. Securities are principally selected on positive rather than negative screens. These positive screens are based on socially useful products and services and strong ESG management, with companies needing to exhibit one or both of these criteria to be approved. The team believes this to be a more socially relevant and financially rewarding approach as it allows capital to be used for social improvement and links closely into the financial analysis of risk versus return. The following exclusions are currently in place on the strategy, tobacco manufacturing, armament manufacturing, nuclear power generation, fossil fuel extraction, pornography production, online & offline gambling establishments and animal testing (other than for purposes of human or animal health and/or where it is required by law or regulation).

The fund will also look to have a materially lower weighted average carbon intentisty (WACI) than its benchmark.

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Royal London Sustainable Leaders Trust C Acc

Responsible Investing Approach

The SI team understands that investing sustainably is subjective and will mean different things to each investor. It also understands that views on sustainability can change over time and this is why the team keeps its approach fluid and adaptable. The team's members embrace the subjective nature of this approach to investing and adapt to the times. In fact, the success of the funds has partly been down to their adaptability. The fund's approach, by traditional methods, would be considered as lighter green than others in the market. However, it should be stressed that there remains a high hurdle rate for inclusion. Should a business experience problems with its ESG credentials then these would be assessed in a similar way to the financial concerns of a company and a re-assessment would be made, rather than it automatically being removed from the portfolio.

The team makes use of third-party research and ratings on a business's sustainable characteristics but it uses this as a starting point for its own proprietary research and not as the ultimate arbiter for inclusion. The team's approved list is independently reviewed by an external Advisory Committee to ensure all companies are aligned with the sustainable mandate. The committee consists of experts from charities, governance and socially responsible practices. The committee's role is to provide oversight and advice on the process and criteria used to assess stocks.

The portfolio is broken down into several sustainable investment themes. These are, circular economy & environmental efficiency, community funding, digiti world, energy transition, ESG practices, financial inclusion & resilience, hygiene & wellbeing, industry 4.0, knowledge & learning, next generation medicine and social & environmental infrastructure.

Risk Summary

This fund seeks to achieve its investment objective through investing mainly in the shares of UK listed companies that are deemed to make a positive contribution to society and/or the environment, although investors should note that Mr Fox also selectively invests overseas. Investors should be aware that investing in a responsible manner can be a very subjective issue and may be defined very differently by investors. It is therefore important that investors are aware of the fund managers' sustainable investment approach to ensure it is not misaligned with their own sustainable preferences.

The fund will invest predominatly in equities which are considered high risk assets and therefore their price can fluctuate significantly. Therefore the fund is only likely to be suitable for investors with a longer-term investment horizon, which we would consider to be in excess of five years, and willing to accept volatility, particularly over shorter time frames.

The sustainable investment approach followed by the team means that the fund is likely to avoid companies which generate a significant amount of their business from certain sectors, for example tobacco and energy. Therefore, when investors are favouring these type of businesses the fund has the potential to lag the wider market.

Additional Information

Annualised Return: 10.13%

Annualised Volatility: 11.54%

Max Drawdown: -10.85%

Max Gain: 12.34%

Max Loss: -7.01%

Sharpe Ratio: 0.75

Sortino Ratio: 0.68

(3 years data to last month end unless otherwise stated)

Qualitative Risk Assessment

	Significant	Potentially Significant	Not Significant
Equity Risk
Interest Rate Risk
Credit Risk
Exchange Rate Risk
Liquidity Risk
Emerging Markets Risk
Derivative Risk
Manager Risk
Gearing Risk
Discount/Premium Risk

For the full summary of the risks, click here

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Royal London Sustainable Leaders Trust C Acc

3 Year Rolling Sector Outperformance

Maximum Drawdown (Rolling 12 Months)

Calendar Year Performance To Quarter End

Period	Fund (%)	Sector (%)
2025	16.4	14.8
2024	8.7	7.9
2023	10.5	7.2
2022	-10.7	-9.3
2021	22.2	17.1

Value for Money

We believe this fund represents good value for money. Its ongoing charge figure (OCF) is meaningfully below that of its peer group, and also has a reasonable total cost of investment. Therefore, considering the sustainable heritage of the team, the resources available to them and the strong performance record we think the fund delivers value for money.

OCF v Peer Group

0.76%

Transaction Costs v Peer Group

0.13%

TCI v Peer Group

0.89%

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Royal London Sustainable Leaders Trust C Acc

Square Mile Analysts

Martin Ward - Senior Investment Research Analyst

John Monaghan - Research Director

Rating Changes

The Square Mile ratings are reviewed every 6 months. For full details on the methodologies, click here.
For a full list of all Square Mile rated funds, click here.

Rating Changes over last 12 months	Time & Date rating changed

Disclaimer

This document is issued by Square Mile Investment Consulting and Research Limited which is registered in England and Wales (08791142) and is a wholly owned subsidiary of Titan Wealth Holdings Limited (Registered Address: 101 Wigmore Street, London, W1U 1QU).

Unless otherwise agreed by Square Mile, this factsheet is only for internal use by the permitted recipients and shall not be published or be provided to any third parties. This factsheet is for the use of professional advisers and other regulated firms only and should not be relied upon by any other persons. It is published by, and remains the copyright of, Square Mile Investment Consulting and Research Ltd (“SM”). SM makes no warranties or representations regarding the accuracy or completeness of the information contained herein. This information represents the views and forecasts of SM at the date of issue but may be subject to change without reference or notification to you. SM does not offer investment advice or make recommendations regarding investments and nothing in this factsheet shall be deemed to constitute financial or investment advice in any way and shall not constitute a regulated activity for the purposes of the Financial Services and Markets Act 2000. This factsheet shall not constitute or be deemed to constitute an invitation or inducement to any person to engage in investment activity. Should you undertake any investment activity based on information contained herein, you do so entirely at your own risk and SM shall have no liability whatsoever for any loss, damage, costs or expenses incurred or suffered by you as a result. SM does not accept any responsibility for errors, inaccuracies, omissions, or any inconsistencies herein. Unless indicated, all figures are sourced by LSEG Lipper (all rights reserved). Past performance is not a guide to future returns.

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