A disciplined investment process is fundamental to a successful long-term investment strategy. It provides the framework for how a fund manager researches companies, constructs portfolios, takes and manages risk, assesses environmental, social and governance (ESG) considerations, and exercises effective long-term stewardship.

Why Investment Process Matters

At Trust Investments, we take the assessment and integration of ESG risks and opportunities seriously. We consider material ESG factors to be an important component of investment analysis and central to investment decision-making. These factors can influence a company’s long-term resilience, competitive position and ability to generate sustainable cashflows, making them an important part of understanding investment risk and opportunity.

The Trust Management ESG Australasian Share Fund (the Fund) has a clear investment objective. Following a review earlier this year of the capabilities needed to deliver that objective, Devon Funds Management (Devon) was appointed as the Fund’s specialist underlying investment manager, effective 7 July 2026. Devon is responsible for implementing investment decisions, integrating material ESGconsiderations into its investment process and undertaking stewardship on the Fund’s behalf.

In carrying out this mandate, Devon brings together four connected elements: active company research, local market knowledge, the integration of material ESG factors and active stewardship. Together, these elements support the investment decisions and ownership activities undertaken on behalf of the Fund.

The Value of Active Management

Local capital markets contain many high-quality businesses operating in sectors that are critical to the functioning of our economies. Yet these businesses often face very different opportunities and challenges.

Through its active investment process, Devon assesses companies individually, considering financial strength, competitive advantage, management quality, future growth prospects and material ESG factors. This company-by-company analysis supports a deeper understanding of investment risks and opportunities than broader market exposure alone.

Local Knowledge Matters

Investing successfully in New Zealand and Australian shares requires more than analysing financial statements.

Local market knowledge, relationships with company management teams and an understanding of sector-specific dynamics can all contribute to investment insight. Direct engagement with companies helps investors better understand business strategy, governance practices and how management teams are thinking about future risks and opportunities.

This perspective can be particularly valuable when evaluating sustainability issues, many of which are evolving rapidly and may not be fully reflected in historical data.

Integrating ESG into Investment Decisions

Responsible investment is not about applying a simple checklist or relying solely on ESG ratings and assessments undertaken by external research houses and rating agencies.

Effective ESG integration considers how environmental, social and governance factors may influence a company's long-term prospects and financial performance. This involves understanding which issues are genuinely material to a business, how management is responding, and whether those factors create risks or opportunities for investors.

When combined with fundamental company research, ESG analysis can contribute to a more complete understanding of long-term value.

Stewardship as Part of Ownership

Investors also have a role to play as owners. Stewardship, including engagement with companies and the exercise of voting rights, provides a mechanism for raising concerns, encouraging transparency and supporting strong governance practices. While stewardship outcomes are often incremental, active ownership can help investors better understand the businesses they invest in and promote accountability over time.

Looking Ahead

The Fund’s approach reflects the belief that long-term investment success requires disciplined financial analysis and thoughtful consideration of the wider factors that influence business performance. These principles shaped the capabilities we sought in appointing Devon as the Fund’s specialist underlying investment manager.

Devon’s focus on fundamental research, ESG integration, active stewardship and long-term thinking is well aligned with these principles. Its success in managing Australasian share portfolios, strong local company knowledge, and the skill and experience of their people were also important considerations in its appointment.

Author: Catherine Bodnar - Investment Analyst, Trust Investments