CT Responsible Global Equity Strategy 2023 Responsible Profile

For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients). This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID / KID before making any final investment decisions.
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CT Responsible Global Equity Strategy 2023 Responsible Profile

Jamie Jenkins
Jamie Jenkins
Managing Director, Head of Global ESG Equities
Nick Henderson
Nick Henderson
Director, Portfolio Manager
Harry Waight
Harry Waight
Portfolio Manager

A year can be a very long time in the markets. Nothing exemplifies this more than 2023.

With astonishing rapidity, investors shrugged off the gloom of 2022 and embraced risk, confident that radical central bank action has tamed inflation, and that rates are coming down, driving the MSCI World up almost 20%. This confidence has spilled over into 2024, despite the Fed keeping the world waiting for its first rate cut, with the continued rally underpinned by growth and technology stocks.

Given our bias towards innovative, quality-growth companies, it was particularly frustrating for us as a strategy to underperform in 2023. There were a number of headwinds, but much of this underperformance was rooted in being underweight to the constellation of stocks dubbed the Magnificent Seven – Nvidia, Tesla, Meta, Apple, Amazon, Microsoft and Alphabet – market cap behemoths who drove the majority of performance in an extremely concentrated rally.

Many of these names we cannot own due to the screens that safeguard this strategy. We firmly believe that having a rigorous, impartially applied set of screens aligns with our client’s ethics and protects their capital in the long term, but there will occasionally be performance penalties to these screens. Such was the case last year.

In a market where so many of the biggest businesses are also its innovation leaders, it is vital to regularly re-screen large benchmark weights to ascertain whether our stance on them is still appropriate, and last year we re-screened most of the Magnificent Seven, with Alphabet moving from non-acceptable to acceptable due to material improvements in its data management practices. We added the stock towards the end of the year. We will continue to review and refine our screens to ensure they are appropriate for the world we are moving in to.

We live in era of continuous innovation, but even by these standards, 2023 has been an extraordinary year of technological change, with history seeming to accelerate in front of our eyes. Artificial intelligence has emerged to become an almost all-consuming interest of markets, driving Nvidia’s historic run to become the second biggest company in the world, and bringing hundreds of billions of dollars of capex off the sidelines to invest in GPUs, semiconductors and data centre capacity, as corporates race to embrace this technology.

AI has the potential to augment and automate a huge range of cerebral tasks the way the industrial evolution substituted machines for muscles two and a half centuries ago. That first industrial revolution was the greatest wealth unlock in human history, but it was accompanied by serious social consequences. The implications of the AI revolution could be equally profound. As responsible investors, we want to attach ourselves to this growth, whilst also, just as importantly, trying to ensure it is applied ethically, wisely and sustainably.

We are a low turnover strategy by design, buying businesses that we have long-term conviction in. This will not change. But in a year of radical market and technological change, it is necessary that we are correspondingly nimble to grasp opportunities before they evaporate. Our turnover in 2023 was consequentially higher than normal, but we believe that the trades we carried out leave us much better positioned in emergent mega-trends. You will read more about these trades in this report.

We are very mindful of the performances challenges of 2023 and 2022. They serve to keep us hungry and disciplined in our investment approach. But it is gratifying to see that trading activity we conducted in 2023 is positively contributing to performance into 2024. These are genuinely exciting times to be an investor, and the opportunity set is rich. We hope to convey some of that excitement in this report, and remain committed to investing your money into the most innovative global businesses, which have both the potential to power long term fund performance, and scope to make a positive non-financial contribution for all employees, stakeholders and shareholders.

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Discover how the companies held in the Strategy correspond to our seven sustainability themes, as well as details such as SDG alignment.

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Important information

© 2024 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
 
For professional investors and qualified investors only.
 
Issued for information purposes only by Columbia Threadneedle Investments.
 
In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.
 
In the EEA: Issued by Threadneedle Management Luxembourg S.A., registered with the Registre de Commerce et des Sociétés (Luxembourg), No. B 110242 and/or Columbia Threadneedle Netherlands B.V., regulated by the Dutch Authority for the Financial Markets (AFM), registered No. 08068841.
 
In Switzerland: Issued by Threadneedle Portfolio Services AG, an unregulated Swiss firm or Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited, authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).
 
In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it. This material should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.

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Important information

© 2024 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
 
For professional investors and qualified investors only.
 
Issued for information purposes only by Columbia Threadneedle Investments.
 
In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.
 
In the EEA: Issued by Threadneedle Management Luxembourg S.A., registered with the Registre de Commerce et des Sociétés (Luxembourg), No. B 110242 and/or Columbia Threadneedle Netherlands B.V., regulated by the Dutch Authority for the Financial Markets (AFM), registered No. 08068841.
 
In Switzerland: Issued by Threadneedle Portfolio Services AG, an unregulated Swiss firm or Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited, authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).
 
In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it. This material should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.

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