Advisers caught a live glimpse of Devon Funds’ new global strategies during the first in-person tour for the Auckland boutique since the COVID-19 outbreak.
In a three-city tour late in May, key members of the Devon investment team along with representatives from global fund partner, Wellington Management, showcased the new bond and equity strategies.
As reported this March, the Wellington-managed Devon Global Sustainability and Global Impact Bond funds tap into the growing demand for environmental, social and governance (ESG) investments.
Established in 1928, the Boston-headquartered Wellington lays claim to launching the first US balanced fund – and, incidentally, spawned the index investing revolution after firing Vanguard founder, Jack Bogle, in 1974.
The manager has also developed a broad ESG approach based on active investment principles and bespoke research tools.
For example, the Wellington website notes: “Most third-party ESG data is backward-looking. Vendors also emphasize different ESG issues, so their findings are inconsistent.”
After creating an ESG research in 2011, Wellington launched a global equities strategy following the approach in 2015 and the international bond fund two years later: the Devon funds feed into these two underlying strategies.
Targeting high active share, low turnover and ‘active engagement’, the Wellington global equities fund is also aligned with the Paris Climate Accord including an aim of a carbon footprint less than half of the benchmark MSCI All Countries World Index.
Meanwhile, the international bond fund is framed around three core themes – life essentials, human empowerment and environment – in an impact investment universe Wellington estimates to be worth at least US$1 trillion.
Tama Willis, Devon portfolio manager, said the firm had received “excellent” feedback on the new global funds during the roadshow.
“It was great to have the Devon investment team back out on the road, meeting face to face with advisers. The current Omicron wave continues to make such events a challenge, but the overall turnout was solid, and the engagement from advisers that attended was very encouraging,” Willis said.
“Advisers seem to appreciate that the Devon investment team is in great shape, with our investment style and relative performance also benefitting from a rotation towards value.”
Devon Australasian equities strategies have experienced a revival over the last quarter and year after lagging during the long period of growth outperformance.
According to the March quarter Melville Jessup Weaver (MJW) investment report, all Devon Australasian funds covered in the surveyed were top three for the quarter.
The swing back to value has been a global phenomenon of late, the MJW report says with the median international growth manager down -11.7 per cent for the March quarter against the index result of -6.6 per cent.
“By contrast, the median value manager beat the index, experiencing a smaller loss of -4.5%,” MJW says.
Devon manages over $2 billion across eight retail funds as well as wholesale and institutional clients (including an approximately $220 million mandate with the NZ Superannuation Fund).