A high conviction portfolio that aims to deliver growth in both income and capital over rolling five-year periods and a yield above the MSCI World Index through active ownership of companies that demonstrate strong dividend growth and compelling sustainability credentials.
We prefer our companies to offer attractive dividend growth rather than a high dividend yield. The ideal dividend company can maintain their asset bases, reinvest in growth opportunities and pay dividends without excessive financial leverage or compromising their allocation of capital. Our dividend analysis therefore focuses on financial leverage and liquidity to help us identify the threats to future cash flows and dividend sustainability. Our dividend stress test highlights what scenarios might put the dividend at risk helping us identify companies that cannot afford their dividend.
We focus on companies with strong sustainable credentials that are driving, facilitating, and promoting positive change – directly or indirectly – across a broad range of areas, from energy wastage, building emissions and power management to food waste, sustainable food diets and raw material depletion. Our proprietary Sustainability Scorecard forms the first part of our company analysis. If a company scores negatively we will not proceed with our research analysis. In addition, we exclude companies that derive more than 10% of revenues from the production or sale of tobacco, alcohol and weapons; adult entertainment; fossil fuel extraction and the provision of gambling services.