Hermes Global Equity Fund celebrates five-year anniversary

? Focus on governance risk in stock selection enhances returns
? Fund has beaten its benchmark since inception

This month, the Hermes Global Equity Fund marks five years of strong outperformance and announces its greater emphasis of environmental, social and governance (ESG) issues within its investment process.

The Fund has delivered an annualised return of 15.9% per annum* compared with the benchmark (MSCI World Net) return of 13.4%. Furthermore, it has earned top quartile rankings* in the IMA Global Equity sector, to 30 November 2013.

The investment team, led by Geir Lode, employs disciplined, fundamental analysis via their proprietary stock-selection model, which replicates the approach taken by traditional investors whilst avoiding common behavioural biases. The output of the model is used to inform the decision making of the team, who combine the model’s systematic analysis with their assessment of a company’s risk profile.

Research recently undertaken with Hermes Equity Ownership Services (Hermes EOS) shows that well governed companies have consistently outperformed the most poorly governed companies from the end of 2008 to November 2013. This finding resulted in an assessment of corporate governance being included within the team’s stock selection model.1

Geir Lode, Head of Quantitative Equities at Hermes Fund Managers, said:
“The fifth anniversary of the Hermes Global Equity Fund is a great milestone and we are very proud of our performance. Moreover, we have always believed in the importance of identifying companies at risk due to poor corporate governance, and are excited by the greater inclusion of ESG considerations within our process.

“Our increasing focus on this has been crucial to our success over the past five years. Having undertaken research with Hermes EOS, we have found statistically significant evidence that well governed companies have tended to outperform their poorly-governed peers since the end of 2008.

“While ESG risks were already considered in our decision making, we now have enough evidence on the efficacy of governance to include it as an important measure of corporate behaviour within our stock-selection model. We’re confident that it strengthens our ability to deliver high risk-adjusted returns”.

Previously known as the Hermes Quant Global Equity Fund, the Fund’s name change came into effect on 2nd December 2013. The objective of the Fund is to achieve long-term capital appreciation by investing primarily in equity securities which are components of the MSCI World Index, or companies listed in the countries referenced in this index.


1 ESG investing: Does it just make you feel good, or is it actually good for your portfolio?, by Hermes Quantitative Equities, to be published on 12.12.13

* Source: Hermes based on F Share Class, net of fees in GBP. As at 05 December, 2013 unless otherwise stated.



For further information, please contact:

Hermes Fund Managers
Jean Dumas
[phone]
[e-mail]

Melanie Shelley
[phone]
[e-mail]


Notes to Editors:

Hermes Fund Managers
Hermes is a unique fund manager – we have been an industry leader in Responsible Investing for over thirty years and offer clients the unparalleled combination of:

? Our Multi-Boutique Structure gives institutional and pension fund clients globally the benefit of access to a broad range of specialist, high conviction investment teams operating within an established and robust operating platform.
? Our Investment Office is a crucial function, acting as a performance risk ‘radar’ for all boutiques’ investment activity and is central to our mission to deliver Sustainable Risk-Adjusted Alpha to all our clients.
? Our commitment to behaving as a Responsible Asset Manager, not merely by being a ‘Responsible Investor’ in quoted companies but also by applying these principles across all asset classes and by behaving as a ‘good fiduciary’ on behalf of our clients.

Hermes' investment solutions include:
? Bonds: Inflation-Linked, Government Bonds, Investment Grade, High Yield
? Alternatives: Commodities, Hedge Fund Solutions, Real Estate, Private Equity, Infrastructure
? Equities: Global, Emerging Markets, Small & Mid Cap, Europe, Japan

Hermes manages assets on behalf of more than 170 clients* across these investment areas with £26.1 billion* assets under management. Additionally, we support pension funds and other global institutional investors worldwide in meeting their ESG responsibilities through our market leading Hermes Equity Ownership Services, which takes on a stewardship role engaging globally on more than £129 billion* of assets.

* Please note the total AuM figure includes £3.5bn of assets managed or under an advisory agreement by Hermes GPE LLP (“HGPE”), a joint venture between Hermes Fund Managers (“HFM”) and GPE Partner Limited. HGPE is an independent entity and not part of the Hermes group. £0.4bn of total group AuM figure represents HFM mandates under advice. Source: Hermes as at 30 September 2013.


The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. Past performance is not a reliable indicator of future results. Further information on investment products and any associated risks can be found in the Fund's Key Investor Information Document (“KIID”) and the Prospectus available from Hermes on request or via our website: www.hermes.co.uk.