This article is supported by T Rowe Price.

The sustainable team at Evelyn Partners has traded in one of its investment trusts for an open-ended fund, among other changes.

Last week the firm announced they’ve switched out their closed-ended Impax Environmental Markets Investment Trust for its sister strategy, the open-ended Impax Environmental Markets.

The key change here is Evelyn’s decision to ditch exposure to share price volatility that’s part and parcel of investment trusts.

“Impax Environmental Markets Investment Trust was sold in favour of slightly smaller positions in its open-ended sister strategy which offers broadly similar underlying exposure without the discount to Nav volatility associated with owning a listed vehicle,” says Genevra Banszky von Ambroz, lead manager of the Evelyn Partners Sustainable MPS team. 

Like Tony Soprano, Impax has been in the waste management business since 2002, predominantly investing in companies that aim to improve energy efficiency, water treatment services, and pollution control. 

In common with every other trust around right now,  the fund is currently trading at a discount to its net asset value, which may explain the allocators’ decision to head for the exit. 

Spare change gained from the switch was used to increase positions in Baillie Gifford Responsible Global Equity Income and Federated Hermes Sustainable Global Equity, which von Ambroz says will provide more diversified, core global equity exposure.

The sustainable team also followed suit with Evelyn’s wider asset allocation strategy: moving away from corporate credit and into government bonds, which they think offers better insurance in case of a potential downturn.

To fund further purchases of nominal US sovereign debt, the Liontrust Sustainable Future Monthly Income Bond was sold in its entirety. 

Evelyn’s overall exposure to fixed income rose slightly as the team works towards a lower duration position across the board.