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  • November 5, 2018
    How tech and female tenacity could shake pp US politics (and the investment industry, too)
    Lewis Grant
  • November 5, 2018
    ESG investing: a social uprising
    Lewis Grant
    Our seminal paper, ESG investing: does it just make you feel good, or is it actually good for your portfolio?, published in 2014, demonstrated the performance benefits of integrating environmental, social and governance (ESG) factors into investment decisions. 
  • October 11, 2018
    Amplified: Global Equity ESG
    Lewis Grant
    In this podcast, Lewis Grant, Senior Portfolio Manager in the Global Equities team, discusses the Hermes Global Equity ESG Fund, in particular covering the following topics:
  • September 25, 2018
    Are ethics really the only way?
    Lewis Grant
    Inflows into ethical funds topped £164m in July, up from £101m the previous month, according to the Investment Association Monthly Statistics for July 2018 from The Investment Association. Lewis Grant, Global Equities Senior Portfolio Manager at Hermes Investment Management, questions what ‘ethical investing’ really means, its implications and dispels investors’ common misconceptions. Let’s start at the very beginning When deciding whether to shift to an ethical investment portfolio, investors first need to go back to basics and set a clear definition of what they constitute as ‘ethical’. Since there is no universal definition, it can be surprising how much variation there is between investors. Exclusion or ‘negative screening’ perhaps offers investors the most direct approach to aligning their money with their morals. It is the oldest ethical investment method, and it’s easy to see why. Carving out entire sectors, companies or countries from a portfolio offers a relatively simple and transparent way for investors to express their particular ethical views and removes subjectivity.
  • August 13, 2018
    Avoiding the hype
    Lewis Grant
    Market behaviour can be extremely erratic which can create a huge amount of uncertainty when predicting the future. In this insight, Lewis Grant, Global Equities Senior Portfolio Manager at Hermes Investment Management, explains why he therefore favours a consistent, boring approach over one that is fuelled by sentiment and hype. Excitement in investment is rarely a good thing. It can create hype which in turn can lead to irrational behaviour. If we take Bitcoin as an example, hype around investment in the cryptocurrency drove the asset class to grow at a phenomenal rate and for a while, this sentiment-led growth may have left investors feeling excited about potential returns. Price momentum can act as an incredibly effective investment signal but it can also be a dangerous one. We believe it is important to remain emotionally unbiased as euphoria should not be the goal of investing. That is not to say such hyper-growth investments need to be avoided altogether, but instead understood in a risk controlled portfolio and as part of a disciplined, diversified approach.
  • July 16, 2018
    The Alpha Model: laying the path to consistent returns
    Lewis Grant
    A mix of geopolitical stresses, political instability, monetary policy tightening and, more recently, global trade tensions, have dominated international news flow – and impacted equity markets – in the last 12 months. Amid such volatility, our all-weather approach enabled us to focus on time-tested company fundamentals. Our proprietary Alpha Model assesses a company’s long-term prospects, by identifying those with the most attractive combination of fundamental characteristics or “factors”. It is then used to create a portfolio that aims to generate consistent, positive relative returns regardless of market direction or the wider geopolitical environment. In this issue of Equitorial, we explain how our model-driven fundamental analysis has generated consistent alpha during a 12-month period of heightened volatility. Defining factor investing For Hermes Global Equities, consistency is key. We believe that the best way to generate superior consistent returns is to apply a systematic approach, which minimises behavioural biases, with disciplined subjective analysis. To do so, we cannot simply categorise ourselves as value, growth, or indeed, quality investors. Such style portfolios can deliver excess returns to the patient investor over the long term, but by definition no form of style investing works consistently. For this reason, we classify our investing style as ‘core’.
  • March 1, 2018
    Italy’s election- obstacles and opportunities for investors
    Silvia Dall’Angelo
    Italian elections are often dismissed as an opera buffa, and this Sunday’s vote is no different. A new electorate system, the political comeback of Silvio Berlusconi and the insurgent Five Star Movement have dominated news flow. But as the eurozone’s third-largest economy prepares to go to the polls, we assess the investment landscape in Italy. Silvia Dall’Angelo, Senior Economist Italy is no stranger to political instability. The country’s political history has been defined by short-lived governments, with 65 administrations taking the helm since World War II, each one lasting for a little more than a year on average. Elections are frequent and post-electoral horse-trading between political parties is common. Between 1945 and 1994, the Christian Democrats took a leading role on the political stage. Thereafter, power swung between the centre-right and centre-left parties. Since December 2016, Italy has been under the caretaker leadership of Paolo Gentiloni, following Matteo Renzi’s resignation as prime minister after his referendum to reform the Senate failed to secure the nation’s approval.
  • February 15, 2017
    Uncovering hidden technologies
    Lewis Grant
    Lewis Grant, Senior Portfolio Manager, Global Equities, at Hermes Investment Management, highlights the technology companies hiding behind the glitz and glamour of consumer-facing stocks. While the New Year kicked off in the UK with grey skies and drizzle in the air, in Las Vegas the glitz and glamour of the CES technology show rolled into town. Amongst the razzmatazz of big budget, ground breaking VR products it is easy for investors to become distracted, however, we look beyond the sequins to discover the hidden technologies behind the futuristic gadgets we see at these shows.
  • December 6, 2016
    Morningstar Series "Why Should I Invest With You?
    Lewis Grant
    Hermes Global Equity fund manager Lewis Grant on avoiding overvalued stocks, and how Trump and climate change will be the key to future investor returns.
  • November 17, 2016
    ESG exclusions: a behind-the-screen analysis
    Lewis Grant
    The exclusion of certain businesses from investment portfolios – such as tobacco or weapons stocks – whose activities oppose the ethical views held by an investor, was initially practiced by a fervent few as one of the earliest forms of responsible investing. Now the movement has a broad following. We support the rise of active ownership as an effective way for investors to exercise their responsibilities, but also recognise that exclusion lists – or screens – can help investors practise their beliefs. Exclusion lists seem simple in principle, but can be complex in implementation: tolerance levels must be set to govern exposures to companies directly involved in one or more screened-out lines of business, as well as those forming related supply chains. Any exclusion list should be enforced carefully. This helps to ensure that an investor’s financial objectives concerning return and volatility can be achieved while also fulfilling their long-term responsibilities.