Triodos Multi Impact Fund is a fund of funds. It invests in other Triodos funds and in impact bonds, creating a broad spectrum of impact related to microfinance in emerging markets, renewable energy, sustainable agriculture and organic food. The funds it invests in primarily provide loans and therefore it has limited exposure to listed stock and private equity. During 2018, the fund returned -0.8%. This result compares relatively well to the international equity markets, which went down 10% or more.
Triodos Multi Impact Fund invests 70% of its portfolio in other Triodos funds, and the remainder is invested in impact bonds. It aims for a broad diversification of impact by investing in funds and bonds with a targeted positive social and environmental purpose.
"Triodos Multi Impact Fund provides investors who do not have their own impact agenda with a broad array of impact", says Hiltrop.
Through Triodos Fair Share Fund and Triodos Microfinance Fund, almost half of the fund is invested in microfinance institutions and banks in emerging and developing countries. ”These offer financial products and services to low-income groups”, tells Hiltrop, “and providing access to people who normally do not have access to it is one of the most important things we can do. It opens up so many opportunities.”
Via Triodos Organic Growth Fund and Triodos Sustainable Trade Fund the fund invests in sustainable trade, and organic agriculture. At least 30% of the fund is invested impact bonds, which are tradeable bonds issued to finance specific social and environmental projects, such as social housing, clean water and renewable energy. Triodos research identifies potential green and impact bonds for investment for Triodos Multi Impact Fund and other Triodos funds, such as Triodos Sustainable Bond Fund.
A safe and stable investment
The fund is also considered to be a very safe and financially stable investment for private investors because of its diversification. "It’s very liquid with a lot of underlying funds being daily tradable and the impact bonds being low-risk", says Hiltrop. Providing an example, he says, "Two years ago microfinance’s financial performance wasn’t so great, and equities were trading well. Last year the stock exchange didn’t do well but microfinance had a good year. The fund’s result was stable because of its diverse portfolio."
Strategic development plans
Forecasting into 2019 Hiltrop shares his vision for the year ahead and describes several strategic development plans.
"We have interest from clients in Belgium and Denmark who are looking for multi-impact investment strategies that have a more aggressive risk return strategy, so we will look into the possibility of building a sister fund that meets those needs."
"We’re also looking at broadening the range of impact funds we include, for example we’re already looking at the SFRE Fund. But the outlook constantly changes, and as my colleagues of our impact equity and bond strategy are implementing their new transition theme strategy, other funds might also become interesting."