Claudia Kwan is not your typical stock picker. She does not invest in the big banks, gas companies, data centres or mining giants that dominate the ASX. And yet, she has beaten the market by more than 20 per cent over the past year.
As managing partner of NorthStar Impact Funds, she invests in the more overlooked corners of the sharemarket, from companies connected to the energy transition to retirement homes, water and even one business that has developed a smartphone tool to detect autism and ADHD.
Kwan says NorthStar Impact’s mandate means that she, and founder and investment chief Kerry Series, look at what a company does, rather than how it does it.
This, the portfolio manager maintains, differentiates the strategy from the ethical, social and governance-focused funds that were hugely popular in the early 2020s, before ESG lost its shine amid accusations of greenwashing.
So instead of just looking at a balance sheet or profit margin, Kwan and Series are also questioning whether a company provides a net good to the world. In practice, it means that whole sectors of the ASX are ruled in or out.
The big banks are automatically excluded because despite providing mortgages and business loans, they also fund fossil fuel companies. Coal and oil companies are clearly out, but copper, which is used in everything from electric vehicles and solar panels to water pipes, is in.
“I only invest in companies that have an articulated and measurable impact on society and the environment,” Kwan says.
Source: https://www.afr.com/markets/equity-markets/how-to-beat-the-market-by-20pc-without-banks-miners-or-data-centres-20260817-p60p35