Outlook for Triodos SICAV I

It has been encouraging to note the increased interest by investors in sustainable investing, resulting in significant growth over the last few years. The expansion of the European market is described in the 2014 European SRI Study published by Eurosif. The interest in socially responsible investment is also mirrored by the growing number of financial institutions that are signatories to the United Nations Principles for Responsible Investors. Even more encouraging is that Triodos SICAV I has grown faster than the sustainable investment market as a whole. We expect the growth of sustainable investment in general and of Triodos SICAV I to continue in 2015. For Triodos SICAV I we aim for growth in all countries where the fund is distributed and particularly in countries where distribution of the fund has just started, for instance in the United Kingdom and Germany.

As a result of this growth trend, new players are entering the market and the market is professionalizing. This is also triggered by best practices for social responsible investors that are (being) developed in different countries. Investors have access to more information, enabling them to make informed decisions. Triodos SICAV I continues to distinguish itself from other funds through its responsible shareholder policies and its strict investment principles. Also in 2015 we will take a look at a number of our investment principles to see if we can strengthen them and further align them with the developments in the market and progress made by companies. Examples are:

  • Financial institutions: these are increasingly criticized for financing controversial activities. We are considering strengthening the thresholds for indirect involvement through loans and bonds, especially when it concerns an activity for which we apply a 0% threshold for direct involvement. This could, for instance, lead to the implementation of a threshold for financing new coal plants.
  • Genetically modified organisms: the fund notices that it is becoming increasingly difficult for companies in the food processing and retail industries to avoid using genetically modified food crops, as the cultivation area for these crops is growing and because outside Europe these crops are not traded separately. Because of this trend, the fund is looking into refining its current position on genetically modified organisms.
  • Human rights: the UN Guiding Principles on Business and Human Rights, developed under the leadership of Professor John Ruggie (the ‘Ruggie framework’) is rapidly becoming the standard for states and companies. We intend to add the Ruggie framework to our list of standards that companies in high-risk industries can adhere to in order to meet our sustainability requirements. Preferably, companies do not only mention the framework, but also endorse, implement and report about it.
  • Arms: we are considering implementing our zero tolerance policy for financial relationships with producers of controversial weapons in a stricter way. At the moment, third-party funds that are sold by a financial institution do not fall under the scope of our requirement, but we intend to include them in the future. In addition, we are investigating the possibility of also applying our zero tolerance policy to execution-only activities and nuclear weapons.
  • Land acquisition: in recent years, interest in farmland as an economic asset has grown considerably. Large-scale land acquisitions are increasingly considered to be controversial on account of violations of human rights and potential adverse environmental impacts. We are investigating the possibility of implementing a policy requirement for companies in high-risk industries.
  • Tax: we will carefully monitor developments in this area and intend to introduce minimum requirements for companies in 2015.

Macro-economic outlook

Economic key figures 2013-2015

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Growth national product

(annual average rate)















Source: Research, Delta Lloyd Asset Management


projections based on information available ultimo December 2014

United States





















Emerging markets














In 2015 global economic growth may come very close to reaching the historical average of 3.5%. Growth differentials, which increased significantly in 2014, will diminish. The United States still offers the best economic prospects. It looks as if Europe will implement more financial and economic stimulus measures. The biggest retrenchments have been completed, while the ECB has stepped up its efforts to combat deflation even further by announcing a large-scale bond purchasing programme of EUR 60 billion per month as of March 1, 2015.

Discord within and between countries is likely to increase further. In the eurozone, eurosceptic political parties may start winning elections. We will have to wait and see what this will do to the stability of the European currency union. The contribution of emerging countries to global economic growth will be relatively limited. Several countries are still too vulnerable to external developments and will likely focus more on reinforcing their external financial positions. On a global level, inflation may already bottom out early in the year.

Equity markets

An acceleration of economic growth, healthy corporate earnings and accommodating monetary policies provide support to the equity markets. Furthermore, given the low interest rate environment, there is still a great deal of capital searching for yield, resulting in strong demand for equities. This creates a particularly favourable outlook for European stocks, which underperformed in 2014, while the competitive positions of European companies have actually improved due to the weaker euro. Political uncertainty, for instance with regard to the ECB’s actions and Greece, should not be ruled out, however. This may cause sentiment to fluctuate in 2015, as in the second half of 2014.

Fixed income markets

In view of the inflation trends, the outlook for economic growth, the ECB’s monetary policy and the ongoing deleveraging process, interest rates in Europe are expected to remain low for quite some time. Whereas the ECB has implemented further economic stimulus measures, the opposite is in fact occurring in the United States and the United Kingdom. In the United States, the liquidity injections have already ceased and the capital market is anticipating the first interest rate hike by the Fed in the second half of 2015. New regulations for banks and insurance companies will result in a constant demand for high-quality (sovereign) bonds. Geopolitical developments, such as those in Ukraine and the Middle East, may continue to affect markets in 2015 and cause considerable volatility.

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