Sit ESG Growth Fund – Responsible and Quality Investing
Sit Mutual Funds added a new product to its family of funds, expanding the total to fourteen different strategies.
The Sit ESG Growth Fund was launched on June 30, 2016. The investment style of the Fund draws on Sit’s long history and expertise in growth stock investing. As an additional screen, the Fund managers select those growth stocks only from companies they believe have strong environmental, social and governance (ESG) practices – an area of the stock market attracting growing attention.
The new Fund is managed by a team of professionals who average 20+ years of investment experience, and directly guide other Sit strategies including the dividend and international growth products. The team consists of Chairman and President Roger Sit, Senior Vice President Kent Johnson, and Vice Presidents David Brown, Michael Manns, and Tasha Murdoff – all bringing breadth experience to the Fund.
The Fund’s managers invest in companies that offer potential for long-term capital appreciation and emphasize earnings growth, which the Firm believes are the primary determinants of a company’s potential long-term return. Several other factors are also considered in evaluating a company’s prospects, including growing product or service demand and market share, management experience and capabilities, and the consistency of earnings growth. Fund managers also place great importance on financially strong companies and favor those with low debt and strong cash flow generation.
In addition to fundamental financial analysis, the stock selection process takes into consideration ESG rankings from industry-leading, third-party services that rank companies within an industry or sector based on ESG characteristics and industry-specific factors. If a company ranking is not available or is believed to be inaccurate, the investment team may utilize its own analysis to determine a ranking or rating. Generally, a company will be considered to have strong ESG practices if it is ranked within the top half of its industry.
ESG factors require subjective analysis, and screens employ a comparative weighting relative to each sector or industry, as some issues may be more relevant to one industry than another. For example, workplace safety may be a more significant issue for a construction firm than for a bank. In general, environmental measures may include a firm’s waste management policy, air and water pollution impact, and renewable energy programs. Social factors may encompass product and workplace safety, customer satisfaction ratings, employee welfare, and workplace diversity. Governance issues can include a company’s record on business ethics, conflicts of interest, whistle-blower programs, and lobbying or political activities.
The Sit ESG Growth Fund invests in both U.S. and foreign companies, and the Fund’s managers primarily focus on large to medium-sized companies with market capitalizations in excess of $2 billion. The benchmark for the Fund is the MSCI World Index, which represents large and mid-sized companies of 23 developed market countries. Two share classes are available: Class S has a minimum investment of $5,000 for a non-IRA account ($2,000 for an IRA), and Class I that has a lower management fee and higher minimum investment of $100,000.
The Sit ESG Growth Fund may be an attractive investment option for investors who desire long-term growth potential and have a preference for investing in companies deemed to have strong ESG practices. For more information on the Fund, contact an investor services representative at 800-332-5580 or visit the Sit ESG Growth Fund webpage.