Companies must also pass a corporate governance check-list.
The final stage is to assess company valuations. Here, the analysts will look at the economic return the company is creating on the capital it uses.
The end portfolio consists of around 50 companies. The fund has returned 69.3 per cent to investors in the past three years, while ongoing charges stand at 1 per cent.
But what about those examples of positive impact on the world? Look no further than the battle against the pandemic for answers. Investments held by the fund included global medical tech company Masimo, which developed a new product to help doctors monitor patients remotely, to Sartorius Stedim Biotech, whose equipment played a role in the production of Covid vaccines. The latter is still the largest holding in the fund at 3.3 per cent.
We have always preferred small and medium-sized companies whose quality and growth potential has been under-appreciated by the wider market. The fact this fund has a global mandate, with a straightforward positive impact screen, is an added benefit to a rock-solid investment process. We think this fund will be a star of the future.
Darius McDermott is managing director of FundCalibre
