Royal London Sustainable World Trust C Acc

March 2026

Overview

The managers of this fund aims to provide capital growth over the long-term from a portfolio of principally equities, but some exposure to bonds, which have all been selected based on their sustainability characteristics and the net positive benefit they have on society. Using this sustainability approach the managers will aim to outperform the composite benchmark of 80% MSCI World and 20% iBoxx Sterling Non Gilts All Maturities Index over rolling 3 to 5 year periods.

Square Mile’s Expected Outcome

We believe a reasonable expectation for the fund is to outperform a benchmark of 80% global equities and 20% bonds over rolling five year periods whilst following a sustainable investment approach.

Square Mile’s Opinion

Many investment groups claim to have environmental, social and governance (ESG) considerations integrated within their research processes, however the Sustainable Investment (SI) team at RLAM truly lives up to that claim. The team only manages funds which incorporate sustainability into their investment mandates and process and actively manages ESG risk. This team works very closely with RLAM's Responsible Investing team, who oversees research into and engagement on ESG for the group. Furthermore the team's approved list of securities is challenged by an external advisory committee whose role is to provide oversight and advice on the process and criteria used to assess businesses. We see all of these factors as strengths of the process.

We like the fact that the team strongly believes that it can add value as a consequence of its process and not that it limits the fund's potential returns. The team is aware that its main strength is the process and its output. This helps to identify sustainably strong and fundamentally sound businesses, and therefore the team doesn't spend a significant amount of time thinking about the broader asset allocation which stays relatively stable. We see the fund as a strong option for investors who wish to invest in a mixture of equities and bonds from companies with sustainable business practices. Some of the bonds held within the fund may be unrated or small in size so they can be less liquid than many larger or rated bonds which increases their risk. During times of market stress, these bonds could be difficult to sell. The fund has an excellent record of meetings it objectives.

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. The Fund’s sustainability objective is to invest in companies or issuers 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 Manager using its “Sustainability Standard”.

Outcome: Capital Accumulation	Domicile: UK
Active/Passive: Active	Benchmark: 80% MSCI World index and 20% iBoxx Sterling Non Gilt All Maturities index
Asset Class: Multi Asset	IA Sector: IA Mixed Investment 40-85% Shares
Yield: 0.83%	Fund size: £3,666M
Fund Manager: Daphne Tsang, George Crowdy, Mike Fox, Sebastien Beguelin	Distribution Pay Date: May, November
Fund Price: 4.3 Pounds	Dividend Frequency: Semi-annual
Currency of Share Class: GBP	Share Class Launch Date: 04/12/2012
NAV: 4.3 Pounds	Year end: 30/09/2025
Discount/Premium: 0.00%	Gearing: -
Permission to distribute from Capital: -	Fees charged: -

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Royal London Sustainable World Trust C Acc

Asset Manager Overview

Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies. RLAM is a wholly owned part of the Royal London Group. The firm is responsible for over £165bn of assets under management (as at 31st March 2024), across a wide range of asset classes.

Fund Manager/Team Overview

This fund is managed by Mike Fox, George Crowdy and Sebastien Beguelin, and the Sustainable Investment (SI) team. The fund was previously a Co-op Asset Management fund but became a Royal London fund when RLAM bought COAM in 2013. Mr Fox is head of the SI team and has managed the fund since launch in 2009.

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.

All securities held within the portfolio should have positive ESG characteristics and be showing leadership in their field. The team is drawn towards innovative companies who challenge the status quo and this typically leads it away from the older traditional industries and towards more innovative companies with structural drivers for growth. The team screens for stocks which have demonstrated long-term wealth creation and those with solid ESG credentials using MSCI Data. This screen, in combination with further reading, helps create a universe of stocks (approved list) which is researched in more detail. The team then undertakes a much deeper analysis of the companies on its approved list to get behind the numbers and understand the key drivers of value. The team does this via company meetings, idea sharing with colleagues and broker research and reports.

The team's process and research means that its investible universe of equities and bonds will only include those securities with a low level of ESG risk. The portfolio will invest principally in equities, generally around 80%, but it will have some exposure to bonds too. The equity portfolio will have a reasonably concentrated number of securities drawn principally from businesses listed in developed markets. The fixed income side of the portfolio will be made up primarily of corporate bonds but unlike the equity holdings will be very diversified. Some of the bonds held within the fund may be unrated or small in size and as a consequence they can be less liquid than many larger or rated bonds which increases their risk. During times of market stress, these bonds could be difficult to sell.

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Royal London Sustainable World 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 (for what?) 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 Sustainable Investment 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. However, a number of negative screens are initially implemented and this includes any company that is or is 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 companies that generate over 10% of their turnover from any one or a combination of the following: animal fur products, pornography, irresponsible gambling, irresponsible drinking and worker exploitation or exploitative consumer practices.

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Royal London Sustainable World Trust C Acc

Responsible Investing Approach

The 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.

Risk Summary

This fund has been awarded a Square Mile Responsible rating as it seeks to achieve its investment objective through investing mainly in the shares of companies globally listed on stock exchanges that are deemed to make a positive contribution to society. 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 a high proportion of the portfolio in equities. Equities 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 5 years plus and willing to accept volatility.>

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. >

The fixed income portfolio will be predominantly invested in credit. The approach of the fixed income team at Royal London is such that they largely undertake their own research into the creditworthiness of each bond. This means that the fund is likely to have a moderate proportion of the fixed income portfolio in unrated bonds or issues which are only small in size. These two characteristics mean that the liquidity profile of some bonds held can be low and that during times of financial market stress it may be difficult to sell them at close to their market value or even to sell them at all.

Additional Information

Annualised Return: 13.07%

Annualised Volatility: 10.81%

Max Drawdown: -14.10%

Max Gain: 11.23%

Max Loss: -9.15%

Sharpe Ratio: 1.03

Sortino Ratio: 0.94

(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 World Trust C Acc

3 Year Rolling Sector Outperformance

Maximum Drawdown (Rolling 12 Months)

Calendar Year Performance To Quarter End

Period	Fund (%)	Sector (%)
2025	14.1	11.8
2024	11.3	8.9
2023	15.2	8.0
2022	-17.0	-10.0
2021	17.7	11.2

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, although the the peer group does contain a number of funds which invest with a multi-manager approach. These funds increase the average OCF. However when compared to other funds invested directly into equities and bonds it also compares reasonably. The fund 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

0.77%

Transaction Costs v Peer Group

0.10%

TCI v Peer Group

0.87%

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Royal London Sustainable World Trust C Acc

Square Mile Analysts

Alex Farlow - Associate Director Multi Asset Research

Charlie McCann - Investment Research Analyst

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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