Stewart Investors readies first US retail fund

The firm currently manages about $400m in US institutional assets

Stewart Investors is preparing to launch its first US-domiciled mutual fund.

The firm, which specializes in sustainable investing, could start operations for its forthcoming Worldwide Leaders Sustainability Fund on January 10, 2023, according to a recent filing with the Securities and Exchange Commission.

Stewart Investors, which has an office in New York, managed more than $17bn on behalf of clients globally as of the end of September, according to a statement provided by the company. It has overseen institutional assets in the US since the mid-90s, currently managing about $400m.

The new fund will invest primarily on the basis of sustainability, thereafter evaluating securities on the quality of management, franchise, financials and valuation, according to the fund’s prospectus. It plans to hold stocks of large- and mid-cap companies that have a valuation of at least $1bn and a minimum free float of $500m. At least 40% of investments will be made outside of the US, the company stated in the filing.

The fund is a US-based iteration of a strategy that has been used in other vehicles for nine years, according to the firm.

“The portfolio manager’s analysis aims to determine if the company’s products, services and operations contribute to positive social and environmental outcomes,” the prospectus states. To determine that, the portfolio manager evaluates a company’s commercial proposition, operational impact, company ethos and context.

In addition, engagement and voting will be “key parts of the investment approach as a means to mitigate business risks,” according to the prospectus.

The investment manager and subadvisor to the fund is First Sentier Investors, which owns Stewart Investors and managed more than $182.5bn in assets globally as of the end of 2021.

The portfolio manager is Stewart’s Sashi Reddy.

The fund has an investment minimum of $5,000 and will be available in Class Y shares, with net expenses after a fee waiver of 55 basis points.