ESG Global Equity Fund-Trillium Asset Management

Trillium Global Equity: Trailblazing ESG Fund Continues to Perform

By Matt Patsky, Jim Madden and Patrick Wollenberg, Trillium Asset Management

Matt Patsky-Jim Madden-Patrick Wollenberg authors-Trillium Asset Mgmt-Trailblazing ESG Fund continues to performIn the ever-evolving landscape of Environmental, Social, and Governance (ESG) investing, the core philosophy of Trillium has remained the same since it was founded in 1982: provide for the financial needs of our clients while leveraging their capital for positive social and environmental impact in alignment with their values.

Over the last 21 years, this approach of the $579 million Trillium ESG Global Equity fund has proven itself, time and again through a long track record of positive results, generating returns responsibly. The Fund has an 8.56% average annual return for the past five years, outperforming 75% of 895 peer Morningstar funds in the World Large Stock category as of August 31, 2020, based on total returns*, with a gross expense ratio of 1.33%.

The differentiation of the Trillium ESG Global Equity fund is in the details. Two decades ago, at the Fund’s inception, there was little in the way of ESG data, so Jim Madden, Co-Portfolio Manager, was part of the team that created the criteria from the ground up. Trillium has been evolving and refining those core metrics ever since.

“Discerning what is important in vetting these companies requires even greater discipline now that ESG and traditional data has grown, and continues to grow,” said Madden.

Why Global?

For over 20 years, the Fund has offered clients a core global equity exposure with what Trillium believes are quality growth companies and diversified assets across countries, sectors, and market caps. Led by a senior Portfolio Managers team, the Fund’s construction has historically delivered higher returns versus its benchmark, the MSCI ACWI over 1, 3, and 5-year periods.

Why Fossil Fuel Free?

The Fund’s mission has always considered Climate Change as a driver that makes fossil fuel exposure inherently risky and so, avoids exposure to the energy sector. By instead investing in companies that Trillium believes understand ESG principles, they conclude that this acknowledgement demonstrates the qualities of innovation and leadership that create a distinct competitive advantage and build long-term value.

Trillium’s commitment to the quality of the Fund speaks to their overall commitment to ESG and many of the principles that inform the firm’s investment strategy are on full display in some of today’s most profound issues, where Trillium’s Shareholder Advocacy continues to be an influential force for change. In addition to investing for positive environmental and social impact, Trillium has a long and proud history of active ownership. The firm leverages the capital of its clients by engaging in dialogue with companies it invests in to work toward improving their environmental, social and governance profiles.

ESG Analysis

In addition to the primary ESG analysis process conducted by Trillium’s equity research analysts, the strategy maintains a proprietary framework to assess each considered company on environmental merits. A comprehensive review of the ecological risk and opportunities analyze seven categories implemented across all sectors. Data is gathered and analyzed by the portfolio managers, equity research analysts and ESG specialists, utilizing a range of resources, including their 20+ years of proprietary ESG company datasets, governmental websites, and non-governmental organizations. Each company is scored accordingly and monitored to assess any material changes to this initial assessment.

Fundamental Research

Trillium’s ESG-integrated fundamental research process efforts include both industry and in-depth company analyses, which cover both quantitative and qualitative considerations. In terms of industry reviews, the team evaluates the respective secular & cyclical dynamics, along with relevant national & regional aspects of a company’s operating environment. In terms of company-specific analysis, the team considers strategic leadership (business model, competitive advantage, strategy, management quality, etc.) and financial fundamentals (economic translation of that leadership, along with analysis of key quality characteristics including margin profile, cash flow, ROIC, net leverage, etc.). Valuation is derived through a combination of a traditional P/E multiple approach and a discounted cash flow analysis (with a 3-stage model), depending on sector & industry and other considerations.

Glossary of Terms:

P/E, or price-earnings ratio, also known as P/E ratio, is the ratio of a company’s share (stock) price to the company’s earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued.

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow.

ROIC stands for Return on Invested Capital and is a profitability or performance ratio that aims to measure the percentage return that a company earns on invested capital. It also represents the residual value of assets minus liabilities.

Trillium Global Equity ESG Fund Performance Chart-6.30.20

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-853-1311.

The MSCI ACWI Index, MSCI’s flagship global equity index, is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 26 emerging markets. One cannot invest directly in an index.


Article by Matt Patsky, Jim Madden, and Patrick Wollenberg

Matt Patsky is CEO of Trillium Asset Management and a Portfolio Manager on Trillium’s Sustainable Opportunities strategy and the Trillium ESG Global Equity Strategy. He joined Trillium in 2009, and has three decades of experience in investment research and investment management. Matt began his career at Lehman Brothers in 1984 as a technology analyst. In 1989, while covering emerging growth companies for Lehman, he began to incorporate environmental, social and governance factors into his research, becoming the first sell side analyst in the United States to publish on the topic of socially responsible investing in 1994. As Director of Equity Research for Adams, Harkness & Hill, he built that firm’s powerful research capabilities in socially and environmentally responsible areas such as renewable energy, resource optimization, and organic and natural products. Matt was most recently at Winslow Management Company in Boston, where he served as director of research, chairman of the investment committee and portfolio manager for the Green Solutions Strategy and the Winslow Green Solutions Fund.
Matt is currently on the Boards of Environmental League of Massachusetts, and Shared Interest. He has also served on the Boards of Pro Mujer, US SIF and Root Capital. Matt is a member of the Social Venture Circle (SVC). Matt is a member of the CFA Society Boston and is a Chartered Financial Analyst charterholder. He holds a Bachelor of Science in Economics from Rensselaer Polytechnic Institute.

Jim Madden is a Portfolio Manager on Trillium’s ESG Global Equity Strategy. Prior to joining Trillium in 2014, Jim was Chief Investment Officer and Senior Portfolio Manager at Portfolio 21. He worked with Portfolio 21 for over 20 years both on the investment team and as the developer of the company’s shareholder activism program. Jim earned a bachelor’s degree and M.B.A. from the University of Wisconsin and is a Chartered Financial Analyst (CFA) charterholder.

Patrick Wollenberg is a Portfolio Manager of the Trillium ESG Global Equity strategy and a Research Analyst covering the financial sector. Patrick joined as an Analyst in September 2018 with previous experience as a portfolio manager and equity research analyst for several Global and European equity funds at ING Investment Management and Robeco Asset Management, where he started his career in 1994. Immediately prior to joining Trillium, he was an Investment Director at John Hancock Investments (JHI), covering global, international, emerging markets and US equity funds for John Hancock. While at JHI, Patrick served as an ESG specialist at the firm, driving product development, content creation and client education. Patrick also served in due diligence roles at Merrill Lynch Global Wealth & Investment Management. Patrick completed his Masters of Science (Honors) in Business Administration in 1992 and Masters of Science Economics (Honors) in 1994 from Erasmus University Rotterdam, The Netherlands. Patrick is a Certified European Financial Analyst.

The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 800-853-1311, or visiting Read it carefully before investing.

Mutual fund investing involves risk. Principal loss is possible.

Trillium ESG Trillium ESG Global Equity Fund may invest in foreign securities, which are subject to the risks of currency fluctuations, political and economic instability and differences in accounting methods. These risks are greater for investments in emerging markets. Investing in foreign securities is riskier than investing in domestic securities. The fund invests in smaller companies, which involve additional risks such as limited liquidity and greater volatility. Trillium ESG Trillium ESG Global Equity Fund’s environmental policy could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have an environmental policy. There are no assurances that the fund will achieve its objective and/or strategy.

Trillium ESG Trillium ESG Global Equity Fund is distributed by Quasar Distributors, LLC. No other products mentioned are distributed by Quasar Distributors, LLC.

* Morningstar ranked PORTX in the top 32%, 28% and 24% out of 825, 725 and 610 World Large Stock funds for the one-, three- and five-year periods ending 8/31/2020, respectively.

The Morningstar percentile ranking is based on the fund’s total-return percentile rank relative to all managed products that have the same category for the same time period. The highest (or most favorable) percentile rank is 1%, and the lowest (or least favorable) percentile rank is based on the total number of funds ranked in the category. Morningstar total return includes both income and capital gains or losses and is not adjusted for sales charges. © 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Each Morningstar category average represents a universe of funds with similar objectives.

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