Fund manager Sjoerd Rozing: “Clear social problem” | 04/30/22

Triodos has launched a fund dedicated to empowering children. What investors can expect. By Julia Gross, Euro am Sonntag

DTriodos Bank’s wealth management company, known for its impact investing, has launched Triodos Future Generations, a fund designed to improve the well-being of children. 0.1% of net asset value is donated to UNICEF annually. Fund manager Sjoerd Rozing explains how to make money with such a portfolio.

€uro on Sunday: Several fund companies are currently considering creating children’s themed funds. Where does this sudden interest come from, is there a specific reason for it?

Sjoerd Rozing: There has been a general awareness of the global challenges we face today, such as climate change, biodiversity loss, rising inequality and the well-being of future generations. Additionally, we find that many thematic impact funds launched in the past focus on environmental issues. For new products, this almost inevitably means that attention shifts to other issues, such as social issues. In this context, wealth managers could try to position themselves early to be able to adapt to the future EU social taxonomy. It was an opportunity for us to support UNICEF while expanding our product range and offering a product with a strong social theme.

They invest in the areas of health and well-being, education, equal opportunities, access to basic services and security. Should company contributions specifically refer to children?

For every company we invest in, we have a detailed explanation of how it contributes to the best interests of children. In some cases, companies are entirely geared towards children. For example, the fund invests in the American company Orthopediatrics, which manufactures orthopedic solutions specifically for children. In other cases, companies are also active in other areas. An example of such a company is Sanoma, which derives more than 50% of its sales from educational products and services for children of primary and secondary school age. The other part of the business focuses on Finnish media products such as newspapers.

As you say yourself, the needs of children are often ignored and neglected. Why, then, should companies that want to change offer an attractive return for investors?

Businesses play a vital role in bringing about much-needed change, as do investors as catalysts for that change. How you invest today will determine the world we live in in the future. This also applies to investments for the benefit of children. We actually see several positive child-related trends where investors can invest in positive change alongside healthy returns. In the education sector, for example, we believe the pandemic has been the trigger for greater digitalization of education. This can lead to a more personalized learning experience and, therefore, better academic results. We believe this trend offers attractive investment opportunities.

What other trends do you see?

For example, increased consumer focus on improving health. We believe it also leads parents to make healthier choices for their children. This creates interesting opportunities to invest in companies that allow the consumption of foods with higher nutritional value, changes in dietary habits and the increase in the consumption of organic products. After all, the number of children who do not have access to education, healthcare and healthy food is staggeringly high. If businesses can help improve access and affordability, it will not only have a positive impact, but it could also translate to increased revenue and cash flow.

Why do you favor small and medium-sized companies in a fairly concentrated portfolio? What is the size of the investment universe?

Every company we invest in must meet our strict minimum investment standards. We believe that small and medium-sized companies are the best fit for the theme, although the fund also invests in larger companies. The portfolio, although relatively concentrated, is sufficiently diversified. In principle, there are more than 100 companies in which we could invest.

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