Latest launches: BNP Paribas launches social bond fund

HANetf, M&G and BlueBay also roll out ESG funds

This is a rolling stream of all the latest responsible investment products coming to the European market and news on rebranded strategies to incorporate a sustainable focus

BNP Paribas launches social bond fund

25 November 2021

BNP Paribas has launched a social bond fund to target essential services, inclusive companies and help small businesses in emerging markets access financial services.

The BNP Paribas Social Bond Fund will invest 75% in sustainable bonds providing water, health, affordable housing, employment, food security, socioeconomic progress or basic infrastructure. The remainder will be invested 25% in socially responsible companies and 10% in microcredit instruments for emerging markets.

Arnaud-Guilhem Lamy, head of Euro aggregate bond strategies at BNP Paribas Asset Management and manager of BNP Paribas Social Bond fund, said: “The growing importance of bonds within thematic management, historically more geared towards equities, and the emergence of social considerations among investors are two major developments in our industry.”

Saturna Capital and HANetf team up for Shariah-compliant ESG ETF

24 November 2021

Saturna Capital and HANetf have launched an Islamic-compliant ESG ETF.

The Saturna Al-Kawthar Global Focused Equity UCITS ETF will be an ‘active’ ETF and will invest in 30-40 Shariah-compliant ESG companies.

Scott Klimo, CIO of Saturna Capital, said: “Saturna Capital believes including ESG factors in an Islamic portfolio further reduces risk, leading to more resilient portfolios and that companies proactively managing business risks related to ESG issues are more resilient and make better contributions to portfolios designed for patient investors. We are therefore delighted to launch the Saturna Al-Kawthar Global Focused Equity UCITS ETF to investors looking for an actively managed ethical fund that invests globally and is benchmark agnostic in terms of geographic and industry allocations.”

Commenting on the rise of active ETFs, Hector McNeil, Co-CEO of HANetf, said: “Active ETFs are the next frontier for the European ETF market. Regulators have played a major role in the rise of active ETFs in the US and what happens in the US tends to follow here. Typically, the US is two to three years ahead in AUM growth and product innovation. If this is the case, then it’s only a matter of time before active ETFs become commonplace in Europe. Over the past two years active ETFs have gone from nowhere to being the main battleground for providers in the US and we expect that to follow suit to Europe.

“It’s still early days for active ETFs but watch this space. My prediction is it will be the hottest growth area in two- or three-years’ time. However, it will mean European regulators having to follow the SEC and allow flexibility to active managers around disclosure.”

M&G rolls out ESG funds on international portfolio bond

24 November 2021

M&G has unveiled the PruFund Planet range of funds on its international portfolio bond.

The firm said the products are the “UK’s first” range of risk-rated, actively managed, multi-asset funds, which aim to generate competitive returns and positive environmental and social outcomes at the same time.

The PruFund Planet range will be available via M&G’s retirement account and international portfolio bond products, with Isas and other bond versions to be made available next year.

Michael Leahy, managing director of Prudential International Assurance, said: “Extending the availability of PruFund Planet to the international portfolio bond gives advisers and their clients yet another way to access the people and planet-focused version of our market-leading smoothed investment solution.

“Crucially, it combines the tax benefits and planning opportunities offered by an offshore bond with the real and growing need for advisers whose clients, particularly in retirement, are increasingly looking for a smoothed investment journey, while seeking to make a positive difference to the planet.”

The range first launched in July 2021 and comprises of five funds, PruFund Planet 1 to 5, which seek to manage risk, pursue opportunities and invest in “high-impact solutions” to the world’s most pressing ESG challenges, the firm added.

BlueBay launches ESG fixed income fund

23 November 2021

BlueBay Asset Management has unveiled its latest ESG strategy, the BlueBay Total Return Diversified Credit ESG Fund.

The fund will avoid companies involved with oil sands and arctic drilling and limit exposure to companies related to thermal coal or fossil fuel exploration and production. It will also exclude sovereigns that have not ratified the Paris Agreement. In addition, controversial weapons, a standard exclusion for all BlueBay funds, and tobacco will not be included.

It will be managed by BlueBay’s head of multi-asset credit, Raphael Robelin, and senior portfolio manager Blair Reid, supported by portfolio manager Maria Satizabal.

Reid said: “Our approach is to target a similar yield to our standard MAC strategy by adjusting the credit risk within our MAC ESG strategy (BB on average for MAC ESG, versus BB+ for standard MAC). We are excited to be launching this latest iteration of our multi-asset credit offering.”

Credit Suisse and JPMAM launch sustainable nutrition fund

22 November 2021

Credit Suisse and JP Morgan Asset Management (JPMAM) have joined forces to launch a nutrition fund investing in companies that link nutrition, health, biodiversity and climate.

The Credit Suisse JPMorgan Sustainable Nutrition Fund was launched last week seeded with $250m.

It targets the United Nations’ Sustainable Development Goals 2 (Zero Hunger) and 13 (Climate Action) by selecting small and mid-cap innovators across the value chain – from growing, processing to consuming food to feature in the global equity portfolio. Some 40-60 stocks will be held carrying out activities such as vertical farming, plant-based proteins and food testing, which all sit within three subthemes: sustainable agriculture, efficient food processes and sustainable & healthy diets.

Jennifer Wu, global head of sustainable investing at JPMAM, commented: “As we transition towards a more sustainable global economy, a focus on sustainable nutrition should sit at the heart of this transition. This new strategy seeks to make a positive contribution to a healthier future, investing in companies which are seeking to address current inefficiencies in the food value chain by making food systems less carbon intensive and ultimately enabling healthier diets.”

 

UNCDF partners with Impact Shares for ETF

4 November 2021

The United Nations Capital Development Fund has collaborated with non-profit ETF firm Impact Shares to launch an ETF.

Announced at COP26 in Glasgow this week, Impact Shares MSCI Global Climate Select ETF has been listed on the New York Stock Exchange. It tracks the MSCI ACWI Climate Pathway Select Index and aims to tackle Sustainable Development Goal 13, which is ‘Take urgent action to combat climate and its impacts’.

It includes UN values in its methodology: companies in the index must abide by the UN Global Compact, and firms that profit from weapons, guns, alcohol, tobacco, palm oil and any form of fossil fuel are excluded.

Preeti Sinha (pictured), executive secretary of UNCDF, which is partnering with ESG Clarity on it’s upcoming Global ESG Summit on 2 December, commented: “The need to address climate change impacts has never been clearer, especially for the world’s poorest and most vulnerable countries.

“We at UNCDF are very proud to support the Global Investors for Sustainable Development (GISD) Alliance by issuing our second ETF with Impact Shares.

“The ETF demonstrates UNCDF’s ability to create innovative financial products that appeal to investors and continue to raise impact standards. And the fee donation will help the UN build climate resilience in the world’s LDCs.”

Rainforest fund seeks to mobilise $100bn

4 November 2021

A global rainforest fund is seeking to raise $100bn to provide investment funds to sovereign rainforest nations through the United Nations Framework Convention on Climate Change’s (UNFCCC) carbon trading platform, REDD+.

The Global Rainforest Fund Capital Market Initiative soft launched last week and is looking for institutional investors to partner with for the project.

According to Fund Nature, the group behind the initiative, there is a huge opportunity as the current global carbon market only covers 21.5% of emissions globally, leaving around 30 gigatons of buy-side demand.

Fund Nature founder and director, Michael Mathres, said the vision is ultimately to stop and reverse deforestation. The two critical elements are to move the carbon price higher so it is aligned with 1.5°C of global warming and applying the rainforest to the capital market by making the REDD+ market liquid.

“The very simple economic facts we deal with currently are rainforests are getting chopped down because it is more economic to do so. It means they are worth more down than up and until we can change that dynamic it is going to continue,” said Alistair Mullen, co-director of Fund Nature.

The REDD+ website states the carbon credit issuers are the national governments of rainforest nations and the standards used were created under UNFCCC processes, approved by COP decisions, and enshrined in the Paris Agreement.

 AXA IM rebrands UK fund

4 November 2021

AXA Investment Managers has repurposed an existing UK equity strategy to integrate ESG practices.

The AXA Framlington UK Growth Fund has been renamed the AXA Framlington UK Sustainable Equity Fund to reflect its new mandate of investing in companies the manager finds that can demonstrate leadership on sustainability issues.

The strategy looks to capture secular growth through three sustainable growth themes – People, Planet and Progress:

  1. People – Ageing demographics and increased social awareness are creating powerful structural growth opportunities in areas such as healthcare, financial planning & leisure activities.
  1. PlanetThe importance of limiting temperature rises is accelerating the need to dramatically cut carbon emissions, increase the amount of renewable energy and use the planet’s resources more sustainably.
  1. Progress – The relentless focus on digitisation provides a route towards sustainability, carbon neutrality, equality and improving skills worldwide. Companies also play a critical role in keeping us safe as more people move online.

Commenting on the launch, Nigel Yates, manager of the AXA Framlington UK Sustainable Equity Fund, said: “We view ESG integration as part of expressing our conviction as long-term responsible investors, avoiding negative issues that can damage portfolio returns but also influencing management to take the right steps towards enhancing their sustainability profile and practices. The UK market offers access to exciting businesses, many of which are benefiting from sustainable secular growth drivers, strong management teams and the UK’s quality corporate governance regime.”

Aegon to launch global sustainable sovereign bond fund

22 October 2021

Aegon Asset Management and Aegon UK have partnered with the Global Ethical Finance Initiative (GEFI) to launch the Aegon Global Sustainable Sovereign Bond Fund at COP26 with an initial £100m investment from Aegon UK.

The fund will be available to workplace pension savers through Aegon UK’s Universal Balanced Collection, which is used by many as a default fund, as well as being available directly, and will be managed by Aegon AM’s global fixed income specialists.

This team is supported by the global responsible investment team, led by Brunno Maradei, who said: “We are delighted to be selected by GEFI as a leading example of sustainable investing. We are proud to work with them and our partners at Aegon UK to promote the new fund at COP26. The alignment of sovereign portfolios with the global sustainability agenda facilitates responsible capital allocation, which has positive long-term social and environmental impact.”

Credit Suisse and BlackRock team up for wellbeing fund

21 October 2021

Credit Suisse and BlackRock have partnered to launch the Health and Wellbeing Fund for the private wealth market.

The fund will target four themes: physical health and wellbeing, mental health and development, nutrition and resources, and financial health.

Lydie Hudson, CEO of sustainability, research and investment products at Credit Suisse, commented: “This joint private market investing program leverages the scale, expertise and strength of both firms to deliver a strong investment experience and outcomes for clients.”

J.P. Morgan launches US sustainable equity fund

20 October 2021

J.P. Morgan Asset Management has launched the JPM US Sustainable Equity Fund investing in a broad selection of companies defined as sustainable.

The fund will be managed by David Small, director of US equity research and Danielle Hines, associate director of US equity research, who will be looking for companies displaying strong governance, superior management of environmental and social issues and have durable economic models.

Dale Erdei, head of UK funds at J.P. Morgan Asset Management, said: “US Sustainable Equity seeks to meet the ongoing client demand for well-designed strategies that can step beyond ESG integration while maintaining a focus on delivering strong risk-adjusted investment performance.”

JPM US Sustainable Equity Fund (OEIC) will have a Total Expense Ratio of 65 basis points (C-share class).

EQT targets €4bn for Future Fund

20 October 2021

EQT is targeting €4bn to launch a future impact fund investing in companies making an impact on the planet, people and prosperity.

Holdings in the EQT Future Fund look to reduce greenhouse gas emissions using science-based targets, improve employee wellbeing, and increase gender diversity to a 50/50 split within the top 20% of the company. Up to 20% of EQT Future’s total carried interest will be linked to achieving the portfolio-level KPIs.

EQT Future will be supported by a mission board, co-chaired by Paul Polman, former CEO of Unilever, UN Sustainability Ambassador, and co-founder of IMAGINE, a social enterprise focused on sustainable transformation, and Jacob Wallenberg, chairperson of AB and vice-chairperson of ABB and Ericsson.

Polman said: “There is an enormous opportunity to invest in businesses that give back more than they take and I am a firm believer that success will come to those who focus on solving the world’s problems. As co-chair, I will focus on the purpose and impact thesis of EQT Future’s investments and leverage my network to connect the team with the right skills and people.”

Polar Capital launches two ‘Smart’ funds

18 October 2021

Polar Capital has launched two ‘Smart’ funds run by Thiemo Lang and his sustainable thematic equity team.

Polar Capital Smart Energy is a global energy fund investing in technology solutions for decarbonisation, while Polar Capital Smart Mobility invests in global companies transforming the transport sector. Both are classified as Article 9 under SFDR.

Lang said: “Investments in solution providers addressing environmental challenges have clearly gained momentum. Over the next decades we will witness a strong decarbonisation of the global energy sector, driven by clean power generation, affordable storage solutions and the deployment of the newest technologies driving down energy consumption. The electrification of the whole transportation sector is at the very heart of these transformational changes. These are truly exciting times for us all, investing in the technology leaders that shape the sustainable energy world of tomorrow.”

GIB and Amundi partner for sustainable world fund

12 October 2021 

GIB Asset Management and Amundi Ireland have teamed up to launched the GIB AM Sustainable World Fund, a sustainable global equity fund.

The Article 9 fund is benchmarked against the MSCI World Index and managed by head of equities Neil Brown, who said: “We employ a six-stage approach to find the businesses whose products are solving the greatest challenges of our time, whose operations are sustainable and who can use this to outperform their peers.” 

Wellington launches global climate equity fund

6 October 2021

Wellington Management has launched a global climate equity fund.

The Wellington Climate Market Neutral Fund will hold both long and short positions, establishing long positions in climate-advantaged companies but still holding companies that will be disadvantaged by climate change mitigation for shorter periods.

It is classified as Article 8 under the SFDR regulation but does not have a sustainability-related investment objective.

Stefan Haselwandter, senior managing director and head of client group at Wellington, said: “Most companies have a degree of climate exposure, but not all companies are positioned to respond to climate risks and opportunities, creating relative winners and losers in the market. As evidence of climate risk mounts over time, this presents an increasing and dynamic long/short investment opportunity set.”

The Fund will be managed by Alan Hsu, managing director and equity portfolio manager, who has 13 years’ experience conducting fundamental analysis and research on the utilities, energy and renewable energy and clean technology sectors. The strategy leverages Wellington’s partnership with Woodwell Climate Research Center, an independent climate-research institute.

Natixis Mirova Global Sustainable Equity fund launches

6 October 2021

Natixis Investment Managers affiliate Mirova has launched a global sustainable equity fund for UK investors.

The Natixis Mirova Global Sustainable Equity Fund will mirror the existing Mirova Global Sustainable Equity SICAV, launched in 2013, and will be managed by Jens Peers, Amber Fairbanks and Hua Cheng.

Its investment selections are based on demographic, environment, technology and governance transitions, as well as gaining exposure to companies that have a positive impact on the UN Sustainable Development Goals. The fund is aligned to a 2C global warming scenario and will typically have 40-60 holdings, aiming to outperform the MSCI World Net Dividends Reinvested Index.

Fairbanks said: “The SICAV version of this diversified equity fund has proven incredibly popular both as a core global equity holding and to complement the existing global equity allocation of investors’ portfolios. We have seen a strong demand from investors in the UK and this OEIC will allow them to more easily access the fund and make a meaningful difference to the sustainability profile of their portfolios.” 

Nuveen adds to sustainable real asset platform

6 October 2021

Nuveen has added Nuveen Natural Capital and Nuveen Infrastructure to its real asset platform, which adopts a sustainable investment approach.

Nuveen Natural Capital combines Westchester Group Investment Management, Nuveen’s farmland investment business, with GreenWood Resources, which specialises in the acquisition and stewardship of forestry assets. Martin Davies, current CEO of Westchester Group, will lead Nuveen Natural Capital

Nuveen Infrastructure will combine private equity and equity-like strategies through Glennmont Partners, alongside Nuveen’s existing diversified private infrastructure platform and its agribusiness, AGR Partners. Following a 16 year period at Nuveen, Biff Ourso will be the global head of Nuveen Infrastructure.

These join Nuveen Real Estate, which remains under the leadership of Chris McGibbon.

Nuveen CEO of Real Assets, Mike Sales said: “We will be better positioned to meet growing global investor demand for long-term sustainably managed investments.”

LGIM unveils sustainable property fund

4 October 2021

Legal & General Investment Management (LGIM) has launched a sustainable property fund to meet demand from DC schemes for ESG real assets.

The Sustainable DC Property Fund adopts ESG investment targets, including net-zero operational carbon in the direct portfolio by 2030, and has estimated the social value created by the fund in order to measure social impact.

Veronica Humble, head of DC investments for LGIM, said: “Our research shows that DC members care deeply about ensuring that their pensions are invested in a responsible manner. The Sustainable DC Property Fund has ambitious carbon reduction targets and provides diversification through access to an alternative asset class that combines income and long-term capital growth.”

In addition to targeting assets across sectors the Fund will target a 30 per cent allocation to the L&G Global Real Estate Equity Index Fund to provide liquidity and support daily dealing for DC clients.

Michael Barrie, director of fund management for LGIM Real Assets, said: “Real estate is central in the transition to net zero as buildings play a major role in supporting a low-carbon economy and society. The demand for real assets is growing, three quarters of our recent major investment consultant conversations in DC Distribution have emphasised demand for them.” 

abrdn launches a global responsible investment strategy

30 September 2021

abrdn has announced a new strategy targeting a 50% reduction in weighted average carbon intensity compared to passive global equities.

The Responsible Global Asset Strategies (RGAS) Fund comprises 20 to 30 global investment strategies and targets a return in excess of 5% over cash1 and a volatility of 4-8% per year over three-year periods.

The managers of the Fund are Katy Forbes, Gerry Fowler and Catie Wearmouth of the Multi-Asset Solutions team.  

To assess ESG risk, the team uses abrdn’s proprietary ESG House Score developed by its central ESG investment team to assess companies in terms of their responsibility and environmental sustainability. The team ranks countries according to ESG and political factors and excludes those with the highest risk. Currently the Fund would not invest in the sovereign bonds or currencies of China, Turkey or India.

Mirova launches sustainable pan-European private equity fund

29 September 2021

Mirova is targeting environmental innovation and technology solutions with its new new pan-European private equity fund.

The Mirova Environment Acceleration Capital Fund, which is classified as Article 9 under SFDR, aims to help sustainable businesses up-scale, invest in megatrends, and support innovation and technology, across five themes: smart cities, natural resources, agri-agro technologies, circular economy and clean energy.  

The target companies will have the following profile:  

  • a business model directly addressing at least one of the targeted SDGs; 
  • mature innovative solutions and technologies; 
  • companies implementing or willing to implement strong ESG standards; 
  • companies with a proven business model; 
  • companies tjat are profitable or almost profitable; 
  • a transaction in which the majority of the proceeds will be used for a capital increase to accelerate the company’s growth. 

The fund’s management team will be led by Marc Romano, head of private equity impact. He said: “Private equity investors have an essential role to play in facilitating the development of impact business models, by providing capital that drives the acceleration of innovative companies and the solutions they offer to environmental challenges.” 

The fund aims to raise €300 million from institutional and private investors.

Northern Trust launches two climate ETFs

27 September 2021

Northern Trust Asset Management has launched two climate-focused ETFs.

The FlexShares® Emerging Markets High Dividend Climate ESG UCITS ETFis designed to offer exposure to high-quality, dividend paying emerging market stocks while seeking to achieve ESG and climate related improvements. It assesses companies across: management efficiency, profitability and cash flow.

The FlexShares® Emerging Markets Low Volatility Climate ESG UCITS ETF will offer exposure to a high-quality universe of emerging markets companies that exhibit lower overall absolute volatility while seeking to achieve ESG and climate-related improvements. It aims to minimize overall portfolio volatility, improve ESG score, improve carbon risk rating and reduce carbon emissions intensity.

FlexShares partnered with index provider Qontigo to develop the iSTOXX Northern Trust Emerging Markets High Dividend Climate ESG Index, which will be the benchmark for the high dividend ETF, and the iSTOXX Northern Trust Developed Markets Low Volatility Climate ESG Index, which will be the benchmark for the low volatility ETF.

DWS’ Xtrackers unveils 10 ESG European equity ETFs

22 September 2021

The ETF arm of DWS Xtrackers has launched a range of 10 ESG screened ETFs.

They all track MSCI indices with ESG screens and offer exposure to European equity sectors including consumer staples, healthcare and energy.

The products are:

ETFAnnual All-in Fee
Xtrackers MSCI Europe Communication Services ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Consumer Discretionary ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Energy ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Financials ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Health Care ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Industrials ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Information Technology ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Utilities ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Materials ESG Screened UCITS ETF 1C0.20%
Xtrackers MSCI Europe Consumer Staples ESG Screened UCITS ETF 1C0.20%
Source: DWS Xtrackers

DWS said MSCI screens are applied with additional filtering for conventional weapons. The screens also remove the worst ESG ‘laggards’ according to MSCI’s ESG ratings system.

“We are pleased to establish these new Xtrackers ETFs providing exposure to MSCI’s ESG screened Europe sector indices. This is in line with the demand we see from clients, while the highly competitive annual all-in fees should also prove attractive,” said Simon Klein, DWS’s global head of passive sales.

Lyxor unveils ETF exposed to green corporate bonds

22 1eptember 2021

Paris-based Lyxor Asset Management has launched a green bond ETF.

The Lyxor Corporate Green Bond (DR) UCITS ETF tracks the Solactive EUR USD IG Corporate Green Bond TR Index, representative of the performance of euro and US-dollar denominated investment grade corporate green bonds compliant with the Climate Bonds Initiative criteria.

It has been listed on the Euronext, Xetra, London Stock Exchange and Borsa Italiana and offers a TER of 0.20%.

Philippe Baché, head of fixed income ETF product at Lyxor Asset Management, commented: “With the launch of this new corporate green bond ETF, Lyxor provides investors with a well-rounded green bond range – aggregate, government and corporate exposures – allowing them to pick and choose a green bond ETF best suited to their investment needs, and providing a simple way to take climate action and transition their bond portfolios towards a more sustainable economy.”

See also: – Green Dream with Lyxor’s Francois Millet: From trends to world transformation

Schroders looks to EMs for impact launch

22 September 2021

Schroders has added an emerging markets strategy to its impact fund range.

Co-managed by Jonathan Fletcher and James Gotto, the Schroder ISF Emerging Markets Equity Impact fund will be aligned with the UN’s Sustainable Development Goals, focusing on areas encompassing responsible consumption, health and wellness, sustainable infrastructure, inclusion and the environment.

It will use the firm’s proprietary impact measurement tools SustainEx and Carbon Value at Risk will be used in the investment process to create a portfolio of 30-50 holdings in emerging markets. The fund’s objective is to generate a positive impact in terms of societal contribution as well as an attractive financial return by investing in sustainably run companies whose products, services or activities help to address the social and environmental challenges faced by less developed countries.

The group said the fund is classified under the EU’s Sustainable Finance Disclosure Regulation as Article 9.

Fletcher commented: “Clients’ interest in understanding the impact of their investment decisions has never been greater. Nowhere is this more important than in emerging markets where the social challenges are often significant and where some countries are at greatest risk from the effects of climate change.

“Public companies have a critical role to play in addressing these challenges. Not only through their products and services, but also by the way they manage their operations, who they employ and their impact on the environment.

“Companies in emerging markets are largely at the early stages in their impact and sustainability journey. As active and long term owners this provides an opportunity for investors to have an impact, further increasing the positive impact that the companies have.”

Regnan announces water & waste fund launch

22 September 2021

JOHCM has announced the launch of a second investment strategy for Regnan, the responsible investment arm it acquired in 2019, in the form of a Sustainable Water and Waste Fund.

The UK onshore OEIC aims to generate capital growth over rolling five-year periods and to pursue a sustainable objective by investing in companies, which provide solutions to global water and/or waste related challenges.

The fund is managed by Bertrand Lecourt, head of thematic investment strategies at Regnan, and fund manager Saurabh Sharma. They previously worked on the Sustainable Water & Waste Fund at Fidelity before joining Regnan.

See also: – On the Move: Newton’s Parry exits for JOHCM

Bertrand Lecourt, head of thematic investments strategies, said: “I am proud and excited to launch the Regnan Sustainable Water & Waste strategy with Saurabh alongside the highly experienced and dynamic Regnan Sustainable Team. Our focus is to deliver compelling returns, diversification benefits and the highest standard of service to our investors, as global allocations shift towards more thematic and sustainable solutions.”

The fund follows the rollout of the Regan Global Equity Impact Strategy in October 2020.

It is initially open to UK investors but an Irish-domiciled OEIC sub-fund will also be launched in coming weeks, subject to regulatory approval, to allow European and Asian investors access to the investment strategy.

Amundi launches fourth private debt impact fund

10 September 2021

Amundi has raised €650m in commitments from longstanding investors for a private debt impact fund.

The fourth in its core private debt strategy, the Amundi Senior Impact Debt IV Luxembourg SICAV-RAIF will be invested solely in euros in senior private debt of around 40 companies within the European Union. The firm said it aims to offer long-term financing, of €10-100m each, to support midcaps through business recovery and expansion plans. This includes relocation of activities that support the environmental transition, and adapt to new modes of consumption.

The fund was marketed exclusively to institutional investors in France, Germany, Austria, Belgium, Denmark, Spain, Italy, Luxembourg, Netherlands, Sweden, Norway and Finland.

Thierry Vallière, head of private debt at Amundi, said: “We launched the fourth edition of Amundi Senior Impact Debt IV with the same investment philosophy as its predecessors, which proved their merits during the recent health crisis.

“The fund will focus on pure senior debt, with a risk framework consistent with the profile of each company, the systematic presence of financial covenants and a particular focus on ESG factors, with namely the integration of impact covenants for most financings as well as supporting companies with their ESG challenges. We are confident in our ability, demonstrated in each of the previous editions of the funds, to rapidly roll out and build diversified and resilient portfolios for our investors.”

Federated Hermes launch climate change fund for Lundie

10 September 2021

Federated Hermes has launched a new impact fund in the form of the Federated Hermes Climate Change High Yield Credit Fund.

Seeded by Swedish National Pension Fund AP1, the UCITS fund will give investors the opportunity to be a driving force for change and collectively make a real-world impact across all sectors, the firm said.

It will use the Climate Change Impact (CCI) Score as an investment framework and analyse the progress and impact towards decarbonisation that holdings are making. The portfolio excludes companies where engagement on climate change transition has failed, as well as controversial sectors and heavy greenhouse gas-emitting issuers that have no desire to change.

Managed by head of credit Fraser Lundie, supported by co-manager Nachu Chockalingam, it aims to generate long-term, risk-adjusted outperformance by investing in attractive high-yield credit instruments and deliver positive impact that supports a low-carbon future.

Lundie said: “The global high-yield market offers great opportunities to identify attractive companies with the willingness and ability to change their operations, products or services in order to generate positive impact for the planet. This fund is a natural extension of our existing credit offering and demonstrates our commitment to making a real difference for our climate and for future generations.

“We have always admired AP1 for setting a high bar when it comes to delivering long-term sustainable returns for its retirees and we are delighted that our pioneering and innovative approach to credit investing has enabled us to join forces one again.”

GAM outsources new climate bond fund to Geneva credit firm

10 September 2021

GAM has created a sustainable climate bond strategy exposed to green and sustainability bonds issued by the European financial sector.

It will be managed by Atlanticomnium SA, an independent Geneva-based fund management company, which has specialised in credit investing since it was founded in 1976 and has managed assets for GAM since 1985.

GAM said the new launch recognises the “pivotal role” banks will play in the environmental transition as the primary source of financing for European corporates and for small and medium enterprises (SMEs). In the first half of 2021, green bond issuance by European banks reached $10bn, driven by a record $33bn in the first half of 2021 alone.

The team will identify bonds by applying its proprietary green bond assessment framework, splits into three layers of analysis – issuer, bond and green asset level. Each layer is assessed individually, using both proprietary research and data from external third parties.

Classified as Article 9 under SFDR, the strategy will overall invest in bonds allocating proceeds to eligible green projects across market caps with measurable impact, such as renewable energy and green buildings.

Stephanie Maier, global head of sustainable and impact investment at GAM, said: “Asset and wealth managers control more than $110trn of capital and how these assets are managed will be key to whether or not we are able to achieve the shared global goal of net zero emissions by 2050 or sooner. We firmly believe asset managers need to be at the forefront in driving that change, and designing solutions to help clients navigate the low carbon transition. The sustainable climate bond strategy, is a compelling offering for investors seeking to generate both a meaningful environmental impact and attractive returns.”

LGIM launches Paris-aligned index fund

10 September 2021

Legal & General Investment Management (LGIM) has expanded its index fund range with a Paris-aligned equity product for UK and European institutional investors.

The L&G ESG Paris Aligned World Equity Index Fund will be exposed to developed market equities while also integrating Paris-aligned reductions in carbon emissions and UN SDG principles.

Classified as Article 9 under the EU Sustainable Finance Disclosure Regulation (SFDR), the fund will track the performance of the Solactive L&G Developed Markets Paris Aligned ESG SDG Index, which has been constructed by the firm to meet the minimum requirements of the Paris-aligned Benchmark (PAB) Regulations.

It has been backed by institutional investors, including London Borough of Newham Pension Fund which has invested approximately £520m, and Irish pension investors, while Legal & General’s alternative asset platform, Legal & General Capital, has also invested £100m.

James Sparshott, head of local authorities distribution at LGIM, said: “We are delighted that the London Borough of Newham Pension Fund has decided to make such a significant investment into our strategy. We recognise the urgency of addressing climate change and continue to experience demand for ESG investment strategies. In line with our own pledge to net zero emissions by 2050, we believe that taking action on climate is in the interest of long-term investors. This fund will benefit from LGIM’s track record in working with the companies in which we invest to improve their resilience to climate risks.”

Janus Henderson launches two sustainable funds

6 September 2021

Janus Henderson has launched two Article 9-classified sustainable funds focused on technology and US companies, respectively.

The Janus Henderson Sustainable Future Technologies Fund will invest in companies aligned with the UN Sustainable Development Goals and which derive at least 50% of their revenues from sustainable technology. It will be looking for emerging and overlooked technology and has identified eight technology themes that sit across the E, S and the G.

An example holding in the edtech theme is Chegg, an online learning and study support platform, which aims to help provide education to more people and increase people’s employability.

The fund’s management team comprises Alison Porter, Richard Clode and Graeme Clark, and will be supported by head of ESG investments Paul LaCoursiere.

Clode said: “Technology has the ability to deliver across all of the components of ESG; while global regulation and classification initially concentrated on environmental sustainability, this fund is looking to go much further and expand to incorporate much wider social issues. The reach of technology is limitless and the sector has a unique and critical role to play in servicing social goals; to help democratise access to services, reduce inequality and upgrade quality of life.”

The fund will be available as an OEIC and is primarily aimed at both wholesale retail and institutional investors in the UK.

See also: – Podcast: Technology must look after environment and society

The firm’s second new fund is the Janus Henderson Horizon US Sustainable Equity Fund, investing in companies responding to things such as climate change, resource constraints, population growth and ageing populations.

It will be managed by Hamish Chamberlayne and Aaron Scully, and also supported by LaCoursiere.

Chamberlayne said: “Sustainability has gained considerable traction in the US over the past months and investors across the world are becoming increasingly aware of the role the US will play in delivering a sustainable future.”

The fund will be available in a SICAV structure and is primarily aimed at investors in the EMEA and Asia Pacific markets.

Fidelity unveils climate solutions fund

6 September 2021

Fidelity International has launched a climate solutions equity fund investing in companies that reduce greenhouse gas emissions.

The Fidelity Funds – Sustainable Climate Solutions Fund is managed by Velislava Dimitrova and Cornelia Furse, who will invest in companies involved in the design, manufacture or sale of products or services in technologies or solutions such as electric vehicles, green hydrogen, autonomous vehicles, renewable energy, smart grids, industrial automation and agricultural efficiency.

Lead portfolio manager Dimitrov said: Climate change has prompted decarbonisation policies around the world to help achieve global carbon neutrality. The world needs to decarbonise urgently, at a faster pace that we have seen to date, and investors can play a major role in supporting this change.

“The decarbonisation challenge is on a scale unmatched in human history. But it is one that offers the companies meeting it a 30-year period of growth that surpasses even the internet revolution.”

Co-portfolio manager Furse added: “Unlike other climate funds, we focus on carbon reduction, not carbon avoidance. Investing in low emission sectors will not be enough to reverse 150 years of rising greenhouse gas emissions.

“The decarbonisation trend is currently at the early stage of penetration and will be driven by a combination of innovation, improving economics, accelerated governmental support and changing consumer behaviours. It is the stocks exposed to these themes that will drive superior investment opportunities for our investors.”

Liontrust launches sustainable multi-asset global fund

1 September 2021

Liontrust is launching a sustainable multi-asset fund aiming to invest in a cleaner, safer and healthier future.

The Liontrust GF Sustainable Future Multi-Asset Global Fund will launch on 13 October 2021 domiciled in Ireland and run by head of sustainable investment Peter Michaelis and fund manager Simon Clements.

The managers will use 21 investment themes to identify investable companies, aiming for 40% to 60% of the fund in equities, 20% to 50% in bonds and up to 20% in cash.

Michaelis said: “The equities and bonds of companies whose products and operations capitalise on the transformative changes that our process identifies will experience stronger growth and have better quality management than the market gives them credit for.

He added: “We are excited to bring this new multi-asset fund to our European clients, with an opportunity to seek strong returns while benefiting society.”

HANetf to list Europe’s first cleaner living ETF

31 August 2021

Investor Quickro, research company Tematica Research and HANetf have teamed up to launch a cleaner living ETF.

Thought to be Europe’s first cleaner living ETF, Cleaner Living ESG-S UCITS ETF will list on the London Stock Exchange, Xetra and Borsa Italiana in early September and be available for sale across Europe.

The ETF will target goods and services benefiting physical and mental health, including healthy food and personal care products, as well as also screening on sustainability areas such as human rights and labour practices.

A statement on the launch said: “While other investment strategies may focus on a specific aspect of the cleaner living theme, such as electric vehicles or organic foods, the Cleaner Living ESG-S UCITS ETF captures the accelerating growth across a much wider span of global trends, reducing its vulnerability to changes in public policy in any one area.”

Hector McNeil, co-founder and co-CEO at HANetf added: “It’s important we offer investors the opportunity to consider unique ETFs that may offer access to long-term, sustainable megatrends, and the ‘cleaner living’ theme is clearly a good addition to the investor’s tool kit and another market first for Quikro and HANetf.”

The tracks the Tematica Bita Cleaner Living Sustainability Screened Index, which accesses cleaner food and dining, cleaner health and beauty, cleaner building and infrastructure, cleaner transport, and cleaner energy. Companies in the index include Beyond Meat, Peloton Interactive and Tesla.

Omar ElKheshen, CEO of Quikro, said: “The craze towards cleaner living is not going away. It has become clear that this sentiment has led to a structural shift in our society, as opposed to a short-term fad, and companies are pivoting to capture the changing consumer spending profile through new products.  Consumers are becoming much more knowledgeable about the products they are purchasing and making conscious choices towards a cleaner, sustainable lifestyle. Demand for cleaner products and solutions, be they beauty products, or the food that we eat, is evident in almost every aspect of everyday life – when at the supermarket when purchasing new appliances or vehicles.”

BlackRock launches ESG version of bond ETF

31 August 2021

BlackRock has launched an ESG version of its global aggregate bond ETF to meet client demand for sustainable products.

The iShares Global Aggregate Bond ESG UCITS ETF (AGGE) tracks the Bloomberg MSCI Global Aggregate Sustainable and Green Bond SRI Index and excludes issuers with an MSCI ESG rating lower than BBB, and sovereign and government bonds based on UN sanction lists. It says this gives it a universe of 20,000 securities compared with the Bloomberg index’s 27,000. It also aims hold at least 10% green bonds.

Brett Olson, head of fixed income iShares in EMEA for BlackRock said: “As the shift to sustainable investing continues to accelerate, we have seen strong demand – from across client segments – for a sustainable global aggregate exposure. Many investors transitioning their fixed income allocations are embracing indexing due to the diversification, transparency and efficiency that ETFs provide.”

Share ClassTERIndexListing exchangeTicker
iShares Global Aggregate Bond ESG UCITS ETF10bpsBloomberg MSCI Global Aggregate Sustainable and Green Bond SRI IndexEuronextAGGE
iShares Global Aggregate Bond ESG UCITS ETF (NZD Hedged)15bpsBloomberg MSCI Global Aggregate Sustainable and Green Bond SRI IndexCBOE EuropeAGENZX
iShares Global Aggregate Bond ESG UCITS ETF (EUR Hedged)10bpsBloomberg MSCI Global Aggregate Sustainable and Green Bond SRI IndexXetraAEGE

WisdomTree ETP to gain exposure to carbon emission allowances

27 August 2021

WisdomTree has unveiled a carbon ETP to gain exposure to carbon emission allowances.

The WisdomTree Carbon ETP reflects the price of the ICE Carbon Emission Allowances futures contract through the Solactive Carbon Emission Allowances Rolling Futures TR Index.

Carbon emissions are capped and under the European Union Emissions Trading Scheme (EU ETS) a fixed number of allowances are issued every year. The price of these allowances is increasing, which WisdomTree said could mean “higher investor involvement could therefore be seen as a positive market outcome”.

Nitesh Shah, director of research, Europe at WisdomTree said: “The EU ETS has firmly established itself as the pre-eminent model for a cap-and-trade carbon abatement system. Its success is seeing a material reduction in greenhouse gas emissions from the sectors and countries covered by the scheme. Futures based on the European carbon market are the most liquid in the world and present an investment opportunity for investors looking to contribute to price discovery in this vital market. Further investor involvement could boost the futures liquidity, continue to improve this market and further this cause.”

Alexis Marinof, head of Europe at WisdomTree added: “Climate change mitigation is front of mind for investors, corporates and policymakers alike, with many seeking to reduce their carbon footprint and align with the Paris Agreement. The importance of these initiatives cannot be understated and has driven demand for a vehicle that provides exposure to carbon emission allowances futures.”

Total EU carbon emission allowances trading activities were valued at more than €201bn in 2020, equivalent to 8,096 million tonnes of carbon dioxide, an increase of 19% from a year earlier.

Amundi launches ESG ETF in Asia

25 August 2021

Amundi has expanded its ESG ETF range with a new fossil free equity ETF in Asian emerging markets.

The Amundi Index MSCI EM Asia SRI – UCITS ETF is listed on Xetra and costs 0.25%. It aims to invest in Asia EM companied with high ESG ratings and exclude negative ESG screens.  

See also: – Green Dream with Amundi’s Caroline Le Meaux: We’re asking companies to clarify their climate targets

Fannie Wurtz, head of distribution and wealth division and head of Amundi ETF, indexing and smart beta, said: “We are convinced that ETFs play an important role in democratising ESG. With this latest addition to our range we are empowering all investors to cost-effectively integrate ESG in their portfolios.”

KGAL launches renewable energy impact fund

10 August 2021

German asset manager KGAL has launched its first renewable energy impact fund – KGAL ESPF 5 – which will be compliant with Article 9 under the Sustainable Finance Disclosure Regulation.

The fund will be available to institutional investors and responds, KGAL said, to increasing institutional demand for opportunities in renewables.

ESPF 5’s predecessor fund, ESPF 4, closed at the end of 2019 with €750m in equity commitments. According to the asset manager more than 90% of the fund’s capital is already committed.

Florian Martin, managing director and head of the firm’s client business, said: “We place huge importance on the decarbonisation of the European economy both from a corporate and an investment perspective.

“For example, based on our efforts to meet various climate change targets, our renewables portfolio supplied almost 1.7 million people with green energy by the end of 2020. And we will not stop there as we will continue to play our part to decarbonise society and ultimately protect our planet.”

The fund will invest in renewable energy such as photovoltaics, onshore and offshore wind power, and hydropower.

It will also consider other renewable energy generation and storage technologies as well as grid infrastructure.

The investment strategy will focus on the EU-27 and the European Free Trade Association member states. The aim is to achieve a target return (net internal rate of return) of 7-9% percent over its 10-year term.

Michael Ebner, managing director and head of sustainable infrastructure said: “The European investment market for renewable power generation offers immense growth and diversification potential.

“We are very well placed to take advantage of this opportunity based on our proven track record in renewables. We entered this space in 2003, which makes us one of the pioneers of the energy transition and have acquired over 150 photovoltaic plants, wind farms and hydroelectric power plants on behalf of our clients since then – and to date our total investments amount to more than €3.2bn across 10 European countries.”

Invesco brings solar energy ETF to Europe

5 August 2021

Invesco has launched a Ucits version of its solar energy ETF that will invest in global companies.

The Invesco Solar Energy UCITS ETF  will increase the weighting to pure-play solar companies, and remove those earning less than a third of their total revenues from solar, or any from fossil fuels.

The ETF will track the MAC Global Solar Energy Index, which focuses on companies making most money from producing solar equipment, supplying the materials needed for solar or installing the systems themselves. Its ongoing charge is 0.69%.
 
Richard Asplund, managing director at MAC Solar Index, said the index has remained largely unchanged since launching in 2008 except for the emergence of some solar technologies, such as tracking systems, in the index now these have become cheaper.

He added: “We have been working with Invesco for 13 years and are excited it is bringing our solar index to investors in Europe.”
 
Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, said: “In following this index, our ETF will be investing in companies globally across the solar industry value chain but emphasising those with significant revenues from solar-related activities.”

AXA IM reshapes European fund into clean tech fund

3 August 2021

AXA Investment Managers has overhauled its Framlington European fund and rebadged it as a clean tech fund, a move which one commentator says could raise possible suitability concerns for existing investors.

The £63.8m European equities fund will be rebranded as the AXA ACT Framlington Clean Economy Fund and will be an onshore version of a global thematic equity strategy that has been running for three years.  

Amanda O’Toole will take over as lead manager on the fund, creating a portfolio of 40 to 60 companies that operate across the clean economy, whose activities support the energy transition and the drive toward resource optimisation, waste and pollution reduction. O’Toole runs the existing offshore clean economy fund.

Axa Framlington European managers Hervé Mangin and Olivier Eugene remain with the business, with Mangin continuing to run the Axa WF Framlington Opportunities fund and Eugene stepping up to become head of climate in May.  

Axa IM said the “official reshaping” of the fund forms part of its strategy to consolidate its UK fund range and offer clients more sustainably managed funds, following a surge in appetite for these strategies. 

Around 256 funds were rebranded as sustainable in 2020, according to Morningstar, and in the first quarter of this year alone, the number was already at 127. However, fund buyers are concerned this could lead to further instances of greenwashing

ESG credentials are important but so is suitability

Independent wealth expert Adrian Lowcock said the fact O’Toole has the suitable expertise to ensure the fund does what it says on the tin is important. 

O’Toole will invest across four sub-themes that offer measurable, clean economy indicators, such as carbon dioxide emissions, water intensity and waste management and tackle several of the UN’s Sustainable Development Goals involving low carbon transport and natural resource preservation.

A “clean tech” thematic filter, built from quantitative and qualitative analysis, will whittle down global listed equities that have a positive environmental impact and adhere to AXA IM’s sectorial policies and ESG standards. 

However, Lowcock said altering the mandate so dramatically could potentially create suitability issues.  

“The fund’s objectives, investment style and market are all being changed to the point it will have little or no resemblance to the original. As such it is hard to see that it will be suitable for existing investors who bought the fund for exposure to European equities,” Lowcock said.  

“Given there is always an issue with inactivity among investors this could leave some exposed to greater risk or unsuitable investments.” 

“Although harder and more expensive, the fairer thing to do is launch a new fund and wind up the existing fund (if necessary) – that way no one is invested in the wrong strategy,” he added.

Rize unveils ETF investing in top impactful companies

23 July 2021

Rize ETFs has launched a product offering exposure to the top 100 most impactful companies in Europe.

The Rize Environmental Impact 100 UCITS ETF (LIFE) has been listed on the London Stock Exchange (LSE), Deutsche Börse Xetra, Borsa Italiana and the SIX Swiss Exchange today.

It was created in partnership with climate policy and sustainable investment specialist Sustainable Market Strategies (SMS), after the firms started to work together last year.

See also:- Cybersecurity risks a growing ESG concern

They wanted to design and implement an environmentally-focused impact investment strategy aligned with the six environmental objectives set out in the EU Taxonomy. LIFE was created after the firms put together a methodology that deconstructs the six environmental objectives into a series of ‘high impact’ investment sub-sectors that the fund invests in.

Rahul Bhushan, co-founder of Rize ETF, explains: “What we have created here in partnership with SMS is an investment strategy and ETF that is purpose-built for taxonomy-aligned portfolios. The EU Taxonomy is incredibly thorough, and provides investors and companies with definitions around the type of economic activities that should be considered environmentally sustainable. We believe this[regulation] is a hugely constructive and positive first step for the asset management industry as we try to phase out greenwashing and vacuous value-signalling.

“Crucially, it also offers much greater clarity to companies as they seek to make their own green transition. LIFE is a simple and transparent way for investors to align themselves to the six environmental objectives set out in the EU Taxonomy with the knowledge that their is being used to back the technologies and solutions that will pave the way to a greener future.“

Félix Boudreault, chief sustainability officer at SMS, added: “We have created an ETF that does not just focus on carbon avoidance, or carbon mitigation, but one which seeks to identify the companies that are leaders and innovators in their respective environmental sub-sectors as per the EU Taxonomy. We are investing across the most cutting-edge technologies and solutions across clean water, EVs, renewables and hydrogen, energy efficiency, waste and the circular economy and nature-based solutions. We are excited about the strategy and look forward to having conversations with European investors.“

ASI launches three climate funds for net zero transition

23 July 2021

Aberdeen Standard Investments (ASI) has launched three Sicav funds in a range aimed at supporting the transition to net zero global carbon emissions.

All three funds that make up the ASI Climate Range comply with EU Sustainable Finance Disclosure Regulation (SFDR) article 9 and each focuses on a different area of the transition to net zero.

The Global Climate and Environment Equity Fund focuses on companies innovating and providing solutions to reach net zero, in particular solutions to the most carbon-intensive sectors.

The Climate Transition Bond Fund looks at leading emissions reducers – from high emission sectors and other sectors – and invests in projects that tackle physical impacts of climate change. It also invests in solutions providers supporting other parts of the economy to decarbonise.

The Multi-Asset Climate Opportunities Fund invests, via equities, bonds and renewable infrastructure, in climate solutions like clean energy, electric vehicles and smart working technologies.

Eva Cairns, ASI head of climate change strategy, said: “Climate change is one of the largest threats of our time and impacts not only future generations, but also many countries and companies around the globe today. Tackling it requires trillions of dollars of investment every year to transform our world into one that emits net zero greenhouse gases. This transformation comes with significant opportunities for investors.

“To have real world impact, we need to look to the future and invest in the solution providers and companies that will help make this transition to net zero happen.”

Lyxor and Bridgewater team up for sustainable fund

20 July 2021

Lyxor and Bridgewater have announced the launch of a UCITS multi-asset sustainability strategy named the Lyxor/Bridgewater All Weather Sustainability Fund.

It will use Bridgewater’s systematic research process to assess and select securities aligned to the United Nations Sustainable Development Goals (SDGs).

The fund is managed by Lyxor and sib-advised by Bridgewater.

Nathanael Benzaken, Lyxor’s chief client officer, commented: “Our clients’ appetite for sustainable investing has grown significantly in recent years, with investors seeking to combine financial and sustainability outcomes.”

Aviva adds Climate Transition Real Assets Fund

21 July 2021

Aviva Investors has expanded its climate transition range with a real assets fund.

Aimed at investor groups, including defined contribution (DC) schemes, it will provide clients with access to direct real estate, infrastructure and forestry assets helping to accelerate, and benefit from, the transition to a low-carbon economy. Areas of investment can include solar, onshore wind and the active decarbonisation of inefficient real estate assets.

The fund will aim to deliver a net annual return of approximately 8% per annum over rolling five-year periods, whilst targeting net zero by 2040 or sooner.

Daniel McHugh, CIO, real assets, at Aviva Investors, said: “One of our key objectives as a business is to ensure we are delivering the investment products and outcomes that our clients demand. As a committed investor, acting and supporting the transition to a low-carbon and climate-resilient world is not only consistent with our values, it is absolutely in line with what our clients now expect.

“There is a huge opportunity to drive our physical built environment toward net zero through Real Assets, where significant investment capital and firepower can make a direct and very material impact through increasing renewable energy, reducing emissions from the overall sector and removing carbon through nature-based solutions.”

BlackRock unveils EM impact bond

21 July 2021

BlackRock has brought to market an actively managed portfolio holding fixed income securities that are seeking a measurable social and environmental impact within emerging markets.

Categorised as Article 9 under SFDR, the Emerging Markets Impact Bond Fund will be available across Europe and invest in a portfolio of Green, Social and Sustainability (GSS) bonds issued by sovereign and corporate issuers operating in emerging markets. 

The firm said the proceeds of GSS bonds held must be fully tied to green and social impact projects, for example in renewable energy, microfinance, ecologically sustainable food production and access to healthcare. A further 20% of the portfolio can be invested in non-GSS bond issuers with strong ESG characteristics that are aligned with the United Nations Sustainable Development Goals.

Rich Kushel, head of BlackRock’s portfolio management group, commented: “The events of the past year have had a profound social impact on emerging markets, which have been the economies hardest hit by the Covid-19 pandemic due to lower rates of vaccination. This is one of the first products with a clear focus on Green, Social and Sustainable bonds for these economies, where capital is needed to drive sustainable growth.

“While emerging market bonds are already a strategic asset class for investors, there is a growing consensus that focused green and social funding can play an important role in closing the gap to the targets laid out in the UN Sustainable Development Goals.”

Edentree launches multi-asset range to advisers

19 July 2021

Edentree has launched a risk-rated range of multi-asset portfolios investing within the group’s fund range.

Aimed at advisers in the UK, the EdenTree Responsible and Sustainable Multi-Asset Cautious, Balanced, and Growth funds will seek to deliver long-term capital growth through a diversified portfolio of assets able to withstand any market environment, taking a bottom-up approach to security selection.

The equity and fixed income allocations will be invested directly into EdenTree’s existing range of funds, while the alternative allocations will primarily be invested in listed infrastructure and real estate investment trusts. 

They will be managed by Chris Hiorns, head of multi-asset and European equities, who is supported by new chief investment officer, Charlie Thomas, who joined the firm earlier this month.  

Hiorns said: “Investors want their portfolios to make a difference and have a positive impact on society and the environment around them. Having launched one of the first ethical equity funds in the UK in 1988, we are not just participating in a fad. This launch demonstrates a continuation of our long-term dedication to performance with principles.”

Invesco launches high yield corporate bond ESG ETF

12 July 2021

Invesco has unveiled an ESG corporate bond ETF.

The Invesco USD High Yield Corporate Bond ESG UCITS ETF will track the Bloomberg Barclays MSCI USD High Yield Liquid Corporate ESG Weighted SRI Bond Index and exclude securities that have an MSCI ESG rating below BB or have no rating, have faced serious ESG controversies over the past three years or are involved in controversial activities. It also won’t invest in securities from emerging market issuers.

Paul Syms, head of EMEA ETF fixed income product management at Invesco, said: “If we start out looking at the broad asset class, we see the current environment could favour taking credit risk over duration for income investors wanting a pick-up in yield, particularly if inflation continues raising the prospects of Fed rate hikes. Strong economic recovery would also typically support risk assets such as high yield.

“The next consideration is on sustainability and the picture being painted by investor flows is vivid. In the first six months of the year, 73% of net flows into fixed income ETFs were into funds incorporating ESG filters.”  

SSGA launches climate transition equity fund

8 July 2021

State Street Global Advisors (SSGA) has launched a climate transition equity fund with seed investment from Kempen Capital Management.

The World TPI Climate Transition Index Equity fund uses Transition Pathway Initiative (TPI) and FTSE Russell data to aid its investment decisions.

“As a supporter of the TPI, we are excited about this new fund, which offers investors a more sophisticated path to drive change than disinvesting from entire sectors and provides the opportunity to significantly improve their portfolio’s climate credentials,” said Carlo Funk, EMEA head of ESG investment strategy at SSGA.

“The use of TPI’s assessments means investors are encouraging companies, particularly those in the most carbon intensive sectors, to take action to plan and work towards aligning their businesses with the Paris Agreement.”

Nikesh Patel, head of investment strategy at Kempen Capital Management, added: “We are pleased to be the seed investor of this fund, which uses a new and exciting approach to assess the climate transition readiness and willingness of companies to be Paris-aligned.”

The UK-domiciled fund hopes to create more climate-conscious investment options for pension schemes and master trusts.

Alistair Byrne, head of UK institutional distribution at SSGA, said: “Pension schemes and master trusts in the UK are actively seeking means to gain exposure to the opportunities that companies can generate from the transition to a low-carbon economy. This fund offers an index-based solution within a life wrapper for pension funds seeking greater alignment to the goals of the Paris Agreement, enabling them to immediately improve their portfolio’s carbon profile and reduce climate risk, while maintaining target returns.”

Nordea global strategy to address climate and social impact

6 July 2021

Nordea Asset Management has launched a thematic global ESG strategy.

The Global Climate and Social Impact strategy is classified Article 9 under SFDR and looks for investments to aid the transition towards and inclusive green economy.

Thomas Sørensen, co-manager of Nordea’s Global Climate and Social Impact strategy, said: “The climate crisis is an issue demanding our attention, yet there is also a fundamental need to address the social issues facing society today. Companies that offer solutions to these problems represent a compelling proposition for investors. New consumers care not only about what the products are made of, but how they are made. That’s why we look for companies that marry purpose and profits.” 

HANetf and Saturna Capital launch sustainable ETF

5 July 2021

Saturna Capital and HANetf have launched a carbon offsetting sustainable ETF.

The Saturna Sustainable ESG Equity HANzero™ UCITS ETF will follow the same investment strategy as Saturna’s US-based sustainable equity mutual fund that launched in 2015 and is run by the same managers, Jane Carten and Scott Klimo.

HANetf’s carbon offsetting brand is known as ‘HANzero™’ and will work in conjunction with carbon offset specialists, South Pole, to directly neutralise the carbon emissions of their investments through projects such as Topaiyo Forest Conservation in Papua New Guinea and the Musi River Hydro Plant in Sumatra, Indonesia. It is classified as Article 8 under the SFDR.

Hector McNeil, co-CEO of HANetf, said: “Active ETF assets are currently small given the size of the overall industry, but growth is strong. ETFGI recently reported that assets invested across active EFTs and ETPs had reached a record $329 by the end of Q1 this year.

The well-recognised advantages of ETFs – intra-day trading, shortability, lendability, having an ETF portfolio held in one venue, portability of positions between trading venues, low entry costs and diversification – are becoming more prevalent. This gives investors the option to gain exposure to the same active investment strategies they already own via an ETF wrapper.  It’s time to bring these benefits to the active management space, creating more choice and more opportunity for both institutional and retail investors.”

BlackRock unveils multi-strategy ESG fund in Europe and announces ESG indexes for five funds

5 July 2021

BlackRock has launched its first multi-strategy ESG fund in Europe, aiming to offer more balanced returns.

The Systematic Multi-Strategy ESG Screened Fund is categorised as Article 8 under the Sustainable Finance Disclosure Regulation and marks a move for the firm into Europe with this strategy, which it says is its first single-manager multi-strategy liquid alternatives UCITS fund with daily liquidity in Europe.

It uses a three-pronged approach to create more consistent returns for those who want more equity diversification but also lower yields than those currently offered by more traditional bonds. This approach includes directional asset allocation, a macro view and driving defensive returns by applying credit expertise to equity selection.

An ESG framework screening out issuers involved with controversial weapons, oil sands, thermal coal, tobacco and civilian firearms sectors, along with issuers in violation of the UN Global Compact, is then applied across all three approaches.

“The ongoing macro environment of low yields and rising inflation has forced investors to re-think the role of fixed income across portfolios as the return and diversification benefits have become more challenged,” said Jeff Rosenberg, senior portfolio manager of the fund.

“This fund can be a solution for investors to tackle these macro and portfolio construction headwinds as it helps to add alternative sources of portfolio diversification and resilience.”

Meanwhile BlackRock will now be using ESG indexes for five of its tracker funds due to client demand and regulatory pressure.  

FundExisting indexNew index
ACS World ex UK Equity Tracker FundFTSE All World Developed ex UK IndexFTSE Developed ex UK Custom ESG Screened Index
ACS UK Equity Tracker FundFTSE All-Share IndexFTSE All-Share Custom ESG Screened Index
ACS US Equity Tracker FundFTSE USA IndexFTSE USA Custom ESG Screened Index
ACS Continental European Equity Tracker FundFTSE All-World Developed Europe ex-UK IndexFTSE Developed Europe ex UK Custom ESG Screened Index
ACS Japan Equity Tracker FundFTSE All-World Japan IndexFTSE Japan Custom ESG Screened Index

The ESG screens will reduce exposure to companies that have business lines or sources of revenue from controversial weapons; small firearms; thermal coal; and oil sands, as well as companies severely violating United Nations Global Compact principles.

Tim Hodgson, head of the UK DC platforms and retirement solutions at BlackRock, said: “From working with our clients, we know that exclusionary screens that avoid exposure to certain companies or sectors are an important part of the ESG toolkit. While pension schemes’ members continue to seek investments that reflect their values on climate change and social issues, scheme trustees are also being asked to consider ESG factors to meet new regulatory requirements.”

J.P. Morgan launches three sustainable OEICs

30 June 2021

J.P. Morgan Asset Management (JPMAM) has launched three sustainable OEICs, including a thematic climate change fund.

Climate Change Solutions will invest in 50-100 early-stage, small and mid-cap companies producing clean energy such as wind, solar, or hydro, less carbon-intensive forms of agriculture or construction, sustainable transport and waste reduction.

It will use JPMAM’s proprietary natural language processing tool, ThemeBot, to screen nearly 13,000 stocks globally, and will be managed by Francesco Conte, Yazann Romahi and Sara Bellenda.

Dale Erdei, head of UK funds at JPMAM, said: “We’re delighted to be growing our sustainable offering in the UK market and particularly excited to be launching a thematic portfolio that has a differentiated approach. The Climate Change Solutions fund is designed to help investors intelligently capture innovative investment opportunities and technologies facilitating the low carbon transition.”

The C-share class of Climate Change Solutions Fund will have a Total Expense Ratio (TER) of 70 basis points.

The other two new funds are the JPM UK Sustainable Equity Fund (OEIC) and JPM Global Sustainable Equity Fund (OEIC), which will both use exclusion policies.

JPM UK Sustainable Equity will be managed by Anthony Lynch, Callum Abbot and Alexandra Sentuc; the fund’s C-share class will have a TER of 75 basis points. JPM Global Sustainable Equity will be managed by Timothy Woodhouse, Joanna Crompton and Sophie Wright; the fund’s C-share class will have a TER of 70 basis points.

HANetf to list Europe’s first ESG gold mining ETF

29 June 2021

HANetf will list Europe’s first ESG gold mining ETF on the London Stock Exchange in July.

The firm hopes AuAg ESG Gold Mining UCITS ETF, created in partnership with AuAg Funds, will allow ESG investors to access gold mining by offering exposure to 25 ESG-screened miners.

The ETF tracks the Solactive AuAg Gold Mining Index, which ranks gold miners for ESG characteristics and excludes all but the 25 best-in-class ESG risk companies in the sector. Independent ESG screening is provided by Sustainalytics.

The fund is equally weighted, with each holding having an allocation of 4% to help avoid the risk of concentration in larger miners. The fund’s total expense ratio is 0.60%.

Eric Strand, CEO at AuAg Funds and founder of the AuAg ESG Gold Mining UCITS ETF said: “Mining is an industry that has seen vast improvements in all aspects of ESG, but standards vary across regions and companies. [The fund] helps investors get exposure towards gold mining companies with the best ESG credentials and invest in the sector more responsibly.” 

Hector McNeil, co-Founder and co-CEO at HANetf, added: “There is also a strong investment story to tell when investing in ESG friendly gold miners which is a growth sector partly due to monetary inflation and the green transformation.”

Wells Fargo’s new strategy looks to decarbonise

29 June 2021

Wells Fargo Asset Management (WFAM) has launched a climate transition strategy aiming to help investors debarbonise.

Climate Transition Global Investment Grade Credit has a goal of decarbonising by 2050 or earlier and is already being used by national pension provider Nest.

It will be managed by Scott Smith, head of multi-sector investment grade, and Henrietta Pacquement, head of investment grade credit Europe.

Deirdre Flood, head of international client group, said: “We must collectively decarbonise the economy to manage climate change in a responsible way. We can invest deliberately to advance this profound transition.”

Diandra Soobiah, head of responsible investment at Nest, said: “The strategy provides us with a robust and measurable framework to decarbonise over time and support the climate transition, helping us to align our portfolio with our net-zero ambitions. It’s important fund managers take the risks of climate change seriously. Our members are likely to be significantly impacted if climate change isn’t addressed, with a strong chance of lower returns at retirement. We commend WFAM for showing leadership in addressing climate-related risks and opportunities in fixed income, enabling us to continue to meet our financial objectives in this asset class.”

BNP Paribas introduces Article 9 low carbon ETF

29 June 2021

BNP Paribas Asset Management has launched a new low carbon thematic ETF that has been classified by the Sustainable Finance Disclosure Regulation as Article 9.

BNP Paribas Easy Low Carbon 300 World PAB UCITS ETF replicates the Low Carbon 300 World PAB index. Administered by Euronext, the Paris-aligned index consists of 300 best-in-class international companies, notably industry leaders in reducing CO₂ emissions. Among the 300 index constituents is a 15% allocation to ‘green’ companies, selected by a committee of experts, which generate at least half their revenue from renewable energy or the development of low carbon technologies.

Isabelle Bourcier, head of quantitative and index management at BNP Paribas said: “The increasing awareness of climate issues among savers, coupled with regulatory changes, is generating high expectations on their part, which is why we have chosen to expand the geographical exposure of our low carbon index offering internationally.”

Morgan Stanley’s new sustainable OEIC target net zero by 2050

29 June 2021

Morgan Stanley Investment Management (MSIM) has launched a global sustainable OEIC with a 2050 net-zero goal.

The Morgan Stanley OEIC Global Balanced Sustainable Fund will invest in companies that contribute to a low-carbon economy, with the goal to decarbonise the portfolio’s core equity exposures according to a 1.5°C scenario, targeting net zero by 2050.

Andrew Harmstone, head of the global balanced risk control strategy at MSIM said: “Through the Global Balanced Sustainable Fund, we have also sought to positively impact society by targeting investments with the explicit intention of generating a measurable positive environmental and social impact, aligned with 11 of the UN SDGs, a focus on decarbonisation and an effective engagement approach to deliver value to our stakeholders.”

Mirabaud unveils climate bond fund

28 June 2021

Mirabaud Asset Management has launched a climate bond fund.

The Mirabaud Global Climate Bond fund targets global issuers with strong commitments to emissions reduction and carbon neutrality and will invest in climate-related and low-carbon green bonds.

It is benchmarked against the Barclays Global Aggregate Bond Index, and the portfolio itself will maintain a weighted average temperature of sub 2°C and net zero in line with the Paris Agreement targets.

The fund is managed by Andrew Lake, Mirabaud Asset Management’s head of fixed income, and Fatima Luis, senior fixed income portfolio manager.

Lake said: “The warming of our planet, which is already on an unsustainable path, will have a significant impact upon our environment, economies, health, and future. As investors, we have a responsibility to future generations and to our planet to make sure that companies and countries adhere to high levels of environ­mental governance and climate reduction targets. This may sound dramatic, but the choice really is that stark.”

M&G add Paris Agreement criteria to two funds

28 June 2021

M&G is aligning two equity funds with the Paris Agreement goals on climate change, as part of its plans to achieve net zero carbon emission across its investments portfolios by 2050.

The M&G Global Select and M&G Pan European Select strategies, both managed by John William Olsen, will have additional criteria so that holdings will either be:

  • Low Carbon Companies with a weighted average carbon intensity lower than 50% of that of each Fund’s respective benchmark
  • Reducing Carbon Companies committed to having in place science-based targets to reach net zero by 2050 (SBTi)

After the proposed changes are implemented, the overall weighted average carbon intensity of the portfolios will typically be more than 50% below that of their benchmark average, while manager Olsen said he expects over 90% of companies in the portfolios will have science based targets in place by 2025.

Reflecting the changes, which will be effective from 31 August 2021, subject to shareholder approval, the funds will be renamed M&G Global Sustain Paris Aligned and M&G European Sustain Paris Aligned, respectively.  

Furthermore, M&G is also proposing to limit the Pan European Select strategy’s universe to continental Europe, excluding the UK, to better reflect UK clients’ preferences when approaching UK and European equity investing.

Olsen commented: “Climate change is arguably the greatest challenge of our time and achieving the Paris climate deal’s objectives is of foremost importance. The changes we are announcing today aim to contribute to this goal and to deliver, we will drive even greater engagement with our investee companies. Active engagement is a key feature of our investment philosophy as active managers, one crucial to achieve real positive change.”

ETF offering carbon offsetting joins European market

28 June 2021

HANetf has launched a clean energy product, which it says allows investors to neutralise their investment carbon footprint in one single trade.

Listing on the London Stock Exchange and available across Europe, the HANetf S&P Global Clean Energy Select HANzero UCITS ETF will use S&P’s Carbon to Value Invested (Metric Tons CO2 per $1m invested) data to calculate a daily accrual of the portfolio’s carbon impact, which will then be offset with certificated climate-positive projects selected with carbon offset specialists, South Pole.

See also: – Assets in ESG ETFs jump 220% in 2020

The offset programmes, linked to the UN’s Sustainable Development Goals, will be paid for within the TER of the ETF and HANetf said it hopes to apply the HANzero process to future launches.

Nik Bienkowski, co-founder and co-CEO at HANetf, said: “Environmentally conscious investors can now target capital growth with the HANetf S&P Global Clean Energy Select HANzeroUCITS ETF, ZERO, safe in the knowledge that any carbon emissions linked to their investment will be offset in some exciting global climate positive projects with our partners at South Pole.

“HANetf is deeply concerned about climate change and want to be able to offer products to environmentally focused investors.  That’s why we have created the first ETF in Europe with the ability to offset carbon. Investors are demanding action from their investment providers, and we are delivering new and innovative ESG features such as the carbon offset under our trademark HANzero.”

BlackRock launches future consumer fund

28 June 2021

BlackRock has launched two new thematic, active equities products with one focusing on sustainability and climate impact in the consumer industry.

The BlackRock Global Funds (BGF) Future Consumer Fund invests in a concentrated portfolio of companies driving the transformation of the consumer ecosystem globally. The group said it will capitalise on a diverse range of consumer themes including changes in consumption patterns, evolution of entertainment and personal wellbeing development.

It will also focus on companies that are reducing their carbon intensity within the consumer ecosystem and is categorised as an Article 8 fund under SFDR.

It is launched alongside the BGF Next Generation Health Care Fund offering cross-regional exposure to companies driving growth and innovation in solutions to healthcare challenges.

New emerging themes are reflected in the portfolio such as genetic medicine, next generation diagnostics, immunotherapy, robotic-assisted surgery, biosensors & trackers, medical AI applications, and telehealth.

Evy Hambro, global head of thematic and sector based investing at BlackRock, said: “There are currently profound shifts occurring in the healthcare space, as well as in the way people consume goods and services globally. On the one hand, technology is enabling a wealth of innovative companies to address emerging health concerns, creating secular growth opportunities for investors. On the other, demographics and the way consumers interact with brands are propelling changes in consumption patterns and preferences, as sustainability considerations come to the fore. Both funds encapsulate these fast-growing themes and expand our thematic offering to cover the latest megatrends developments we’re witnessing in a post-pandemic world.”

Rathbone sustainability fund renamed

25 June 2021

Rathbone Unit Trust Management has rebranded its Global Sustainability Fund to incorporate its sister division Greenbank as this better reflects the collaborative management of the fund.

The fund is run by Rathbone Unit Trust Management, with David Harrison as lead manager, while specialist ESI investment research is provided by Rathbone Greenbank Investments, which sits under Rathbone Investment Management.

Ahead of its three-year anniversary, the fund’s new name is the Rathbone Greenbank Global Sustainability Fund.

SSGA unveils climate bond fund range

25 June 2021

State Street Global Advisors (SSGA) has announced the addition of a climate bond fund range with a Finnish pension insurance company seeding $275m in the three new funds.

The range aims to support investors looking to reduce their exposure to carbon emissions and fossil fuel, while also The trio of funds will invest in US, euro and global corporate bonds using an approach that assesses climate impact and excludes controversial issuers.

Carlo Funk, EMEA head of ESG investment strategy at SSGA, said: “This new Sustainable Climate fund range enables investors to manage climate risks in their core corporate bond allocations and increase their exposure to green bonds and companies aligned with the transition, while keeping close to the index returns.”

Varma Mutual Pension Insurance Company, an earnings-related pension insurance company in Finland, are investing a total of $275m in the new funds.

Fidelity adds trio of multi-asset products to sustainable range

11 June 2021

Fidelity International has expanded its cross asset Sustainable Family of Funds with three OEICs – the Fidelity Sustainable Multi Asset Conservative Fund, Fidelity Sustainable Multi Asset Balanced Fund and Fidelity Sustainable Multi Asset Growth Fund.

Targeting the UK adviser market, they will invest primarily in strategies drawn from the Sustainable Family of Funds, and maintain a minimum of 70% of net assets invested in securities deemed to have sustainable characteristics.

The risk-rated range aim to deliver capital growth over the long term with the lower risk funds having greater exposure to fixed income, and moving up the risk spectrum, each fund will take on a greater allocation towards growth assets such as global and emerging market equities.

Managed by Fidelity’s solutions and multi-asset team, with Nick Peters as lead portfolio manager and Ayesha Akbar as co-portfolio manager.

John Clougherty, head of UK wholesale at Fidelity International, said: “With increased regulation and growing client demand, we recognise the importance to the UK adviser market of building sustainability considerations into suitability assessments and their fund section process.

“For those clients who require an enhanced ESG screening, we are pleased to offer a growing selection of funds in our Sustainable Family of Funds spanning our equity, fixed income, ETF and now multi asset franchises, providing a wide ranging but universal and robust approach to sustainable investing.”

The funds carry an OCF of 0.5%.

Vontobel recruits from Federated Hermes for impact launch

Vontobel has hired a new manager to run a global impact equity fund.

10 June 2021

Elena Tedesco is joining as portfolio manage from Federated Hermes, where she was the co-portfolio manager for the global emerging markets ESG strategies and director of sustainability for the global emerging markets team.

Joining Vontobel’s listed impact team, she will run the newly launched Global Impact Equities strategy, domiciled in Luxembourg which seeks a “double dividend” for investors by investing in companies, which contribute to the advancement of the United Nations Sustainable Development Goals (SDGs). It will also target companies that are helping to address critical challenges such as pollution and climate change, resource scarcity, food distribution, population growth, insufficient healthcare, rising inequalities, financial exclusion and illiteracy.

These will sit across eight investable areas: four focusing on companies that work towards a better environment, such as clean energy, clean water, sustainable cities and innovative industry and technology, and the remaining four areas pertain to societal change: good health and wellbeing, sustainable food, responsible consumption and equal opportunities.

Under Sustainable Financial Disclosure Regulations (SFDR), which launched across Europe in March to categorise responsible investment vehicles, the fund qualifies under Article 9.

Incoming manager Tedesco said: “The increasing demand for innovative solutions that contribute to a better environment and societal change will lead to market share gains, pricing power and rising stock prices. Moreover, such companies are less exposed to tightening regulation than their competitors. We are committed to creating real and tangible change through this positive impact fund, including continued engagement with companies on the most pressing societal and environmental issues.”

Before joining Federated Hermes, Tedesco was an analyst at Deminor, a Belgium-based independent research boutique. She has a 20-year career history covering integrating sustainability in fundamental equity analysis and engagement, and was responsible for developing the investment approach to sustainability and ESG issues for Federated Hermes’ emerging markets equity strategies.  

Dan Scott, head of impact and thematics, commented: “Elena is well-known in the industry as an expert on sustainability and has been at the vanguard of ESG for the last two decades. Her strong background and experience in broader ESG issues as well as specifically in impact investing will play a key role in further strengthening Vontobel’s expertise in the impact space to generate value for our clients.”

The institutional share class of the Global Impact Equities Fund carries a fee of 0.83%.

Thematics launches wellness fund

10 June 2021

Natixis-owned Thematics Asset Management is expanding its product range with a fund focused on physical and mental wellbeing.

The Thematic Wellness Fund will be run by Marine Dubrac, who joins the firms from Candriam, and co-portfolio manager Pierre-Alexis François.

Its aim is to invest in companies that provide products, services and technologies to individual consumers proactively seeking to ensure their long-term physical and mental wellbeing, to support the third United Nations Sustainability Development Goal (SDG): to ensure healthy lives and promote well-being for all at all ages.

Mohammed Amor, CEO of Thematics Asset Management, commented: “Individuals are increasingly focused on being healthy in body and mind, a long-term trend that we anticipated some time ago and that has rapidly accelerated due to the global health pandemic. The stakes are high. We all need to play along.”

The portfolio of global companies will be grouped into three categories based on the end market applications of the relevant product, service or technology: prevent, monitor and improve. The portfolio will hold between 40 to 60 high conviction stocks.

Under Sustainable Financial Disclosure Regulations (SFDR), which launched across Europe in March to categorise responsible investment vehicles, the fund qualifies under Article 9.

Whitechurch unveils low-cost responsible portfolios

9 June 2021

Whitechurch Securities has launched a range of low-cost responsible portfolios, reports ESG Clarity sister title Portfolio Adviser.

The Responsible Dynamic portfolios cover a range of risk profiles from low-risk defensive through to more aggressive strategies.

They will invest in a range of exchange traded funds and trackers with up to 30% in active funds.

The portfolios have an annual management charge of 0.2% and will be available direct and on a range of platforms.

See also: Advisers urged to look beyond headline cost as MPS price war intensifies

Whitechurch investment director Amanda Tovey said: “While historically passive funds in the ESG space have had a lot of bad press, in recent years a lot of work has been done in this space to improve the offering and we feel now is the right time to launch a competitively priced passive solution.”

The range comes in addition to the Whitechurch Prestige Ethical range which has a five-year track record.

It comes at a time when a growing number of asset managers, including Schroders and Legal & General Investment Management, are launching their own low-cost model portfolio services that lean heavily on passive strategies.

Gresham House launches forestry fund 

7 June 2021 

Alternatives asset manager Gresham House has launched a forestry fund investing in the creation of new woodland and the protection of existing forests.  

The Gresham House Forest Growth & Sustainability strategy aims to generate returns through the sale of timber and the capital growth of land and trees from existing forests. Meanwhile, the creation of more than 10,000 hectares of new woodland captures carbon and generates carbon credits, which investors will receive.  

See also: – Green Dream with Gresham House CEO: We have more resources and more ambition

Anthony Crosbie Dawson, director of forestry and private clients said: “The merits of this strategy for investors are numerous. By combining exposure to commercial forestry and carbon sequestration, this strategy offers an opportunity to benefit from capital growth and income generation, whilst meaningfully combatting climate change. Additionally, sustainable forestry offers protection against mounting inflationary pressures, alongside strong portfolio diversification due to its uncorrelated returns. 

“By increasing the UK’s forestry stock, we are also contributing to the UK’s natural capital, enhancing the country’s climate, biodiversity and flood mitigation.” 

Heather Fleming, managing director, institutional business at Gresham House, added: “This new strategy launch represents a natural extension of Gresham House’s longstanding expertise managing commercial forestry assets. We expect to see strong interest in this sustainable solution that combines existing commercial forestry and woodland creation, as demand for ESG investments and carbon credits continues to contribute to rising forestry valuations. The flexibility of being able to retain the carbon credits for insetting or selling them for income provides investors optionality dependent on their carbon footprint and return requirements.” 

Nuveen invests in ESG leaders in new impact bond fund 

7 June 2021 

Nuveen has launched a Global Core Impact Bond fund.  

Co-managed by head of ESG/impact – global fixed income Stephen Liberatore, head of international and emerging markets debt Anupam Damani and co-portfolio manager for the existing ESG/impact fixed income accounts Jessica Zarzycki, the fund will use Nuveen’s proprietary public fixed income impact framework, including transparent use of proceeds and annual disclosure of measurable outcomes, to ensure positive impact.  

It will direct capital towards affordable housing, community and economic development, renewable energy and climate change, and natural resources. And will allocate up to 40% in emerging markets and 15% in high yield, at the managers’ discretion. It will launch with $25m seed capital. 

Liberatore said: “Significant investment is needed to combat some of the key issues our society faces, including climate change, global inequality and chronic housing shortages across the world. Yet the perception – an inherently false one – is that impact objectives either require a performance sacrifice or can be pursued only through private strategies.  

“We firmly believe public markets, and in particular the fixed income space given its size, can offer investors attractive risk-adjusted returns, while ensuring they have a measurable societal and environmental impact.” 

Alex Prout, head of global client relationships, added: “The global pandemic has brought to the fore the need to tackle social and environmental issues head on. In response, we are seeing increasing demand from our clients for investment solutions that offer both returns and tangible impact. We can make real progress in areas such as affordable housing and community development, by investing in a range of public fixed income sectors where proceeds can be tied to specific projects or initiatives or are used to fund entities fully engaged in such efforts. This appeals to clients globally, as they seek to align their investments to specific outcomes.”  

The fund is available to investors based in Denmark, Netherlands, Switzerland, Germany, the UK and Italy.  

BNP Paribas launches Ecosystem Restoration Fund 

7 June 2021 

BNP Paribas has launched an Ecosystem Restoration Fund that allows investors to access organisations that aim to restore and preserve global ecosystems and capital. 

The firm said there is a desperate need to protect natural capital and an investment of $22trn over the next decade will be required to restore this. Thematic investing has previously been more concerned with areas such as renewable energy, but now, natural capital is being recognised globally as one of the most crucial elements of addressing the climate change issue. 

See also: – New benchmark to ‘root out impact-washing’ finds room for improvement

Targeting six of the UN Sustainable Development Goals, BNP Paribas Ecosystem Restoration will focus on three themes: 
 

  1. Aquatic ecosystems 
  1. Terrestrial ecosystems 
  1. Urban Ecosystems 

Together with integrated ESG criteria, the fund combines macro and fundamental research in order to identify “best-in-class companies”. Launched in response to increasing demand from clients, it includes research aimed as accelerating development of “biodiversity measurement indicators”.  

Edward Lees, co-manager of BNP Paribas Ecosystem Restoration, said: “Half the world’s GDP is dependent on natural capital and our consumption of it is 1.75 times faster than the earth can generate.”  

Stonehage Fleming adds standalone equity fund to global sustainable portfolios

25 May 2021

Stonehage Fleming Investment Management has added a global sustainable equity fund to its global sustainable investment portfolios.

The Global Sustainable Equity Fund will mirror the process for equities in the sustainable portfolios, where the firm sees opportunities as we approach COP26 in November.

Graham Wainer, CEO and head of investments at Stonehage Fleming Investment Management, said: “We made the decision that this, our first standalone sustainable investment fund, should be focused solely on equity investments as we see them as the key drivers of return.

“Our equity investments can tackle a breadth of issues, including building back from Covid-19 and helping to address the majority of the UN’s Sustainable Development Goals. We can also measure and report the impact that our clients’ investments make towards creating a sustainable planet and society.”

The family office launched its global sustainable portfolios back in 2019. At the time it said it constructs portfolios by selecting funds from across the industry, blending manager skills to meet a variety of risk-return objectives, and that the resulting asset allocation and risk-adjusted targets would be very similar to its mainstream portfolios.

However, it added the overlap in funds between its sustainable and existing portfolios is very low, as the fund managers are required to overcome different and demanding hurdles, such as their approach to governance and impact methodologies.

Vanguard adds second fund to ESG ETF range

25 May 2021

Vanguard has added a second fund to its ESG ETF range within a matter of months as it continues to play catch-up with passive rivals on the responsible investing front.

The Vanguard ESG Global Corporate Bond Ucits ETF will track the Bloomberg Barclays MSCI Global Corporate Float-Adjusted Liquid Bond Index, which has been screened to exclude companies involved in weapons, non-renewable energy, GMOs and vice products like adult entertainment, gambling, alcohol and tobacco.

Issuers with “very severe ESG controversies” or “red flags” as defined by the UN Global Compact Principle have also been removed.

The fund is meant to serve as a “core building block for ESG-aware portfolios” by providing “broad diversification while incorporating robust screening based on ESG criteria,” according to a press release announcing the launch.

It takes the total of Vanguard’s ESG trackers to six and marks the first fixed income product in its responsible investment stable.

Vanguard has been ramping up efforts to boost its ESG ETF offering after years of trailing behind other passive giants, including its biggest rival Blackrock.

In the past 12 months it has rolled out five funds, including the recently launched Vanguard ESG Global All Cap Ucits ETF, to sit alongside its existing SRI European Stock fund launched over a decade ago.

Despite its recent fund launches the $7.5trn asset manger’s commitment to ESG has been described as “low” by Morningstar, and its voting record continues to be called into question.

recent report from nonprofit company As You Sow revealed Vanguard, as well as Blackrock, T Rowe Price and State Street, voted in favour of management resolutions more often when they had business ties for financial services.

Vanguard head of ESG strategy, UK and Europe, Fong Yee Chan said: “Vanguard continues to seek ways to deliver long-term ESG strategies to give value to investors. For those investors wishing to mitigate ESG risk or avoid companies that don’t align with their values, we are pleased to offer access to an ESG global corporate bond strategy through the new Vanguard ESG Global Corporate Bond Ucits ETF.”

The ETF will be managed by Vanguard’s 57-strong fixed income group, which manages more than $1.7trn assets globally.

With an ongoing charges figure (OCF) of 0.15% it is the second cheapest ESG fund in the passive giant’s stable, behind the SRI European Stock fund, which has an OCF of 0.14%.

Source: Vanguard

UBS launches Future of Earth fund

25 May 2021

UBS Global Wealth Management (GWM) has launched a new thematic equity fund aiming to address environmental issues.

The Multi Managers Access II – Future of Earth fund, which will invest in small, medium and large-caps in global developed and emerging markets, is aligned to the SDGs and focuses onfour themes: people, health, communities; sustainable energy; land; and water. Each theme is tackled by a different portfolio manager: Allianz Global Investors, Pictet Asset Management, Polar Capital, and Robeco. Each will be benchmarked against a specific MSCI thematic index.

UBS GWM’s other thematic funds are Digital Transformation Dynamic, Digital Transformation Themes, and Future of Humans funds, which were made available to investors in 2020.

Bruno Marxer, head of global investment management, said: “In an environment of rising bond yields and increased volatility, we see an opportunity for investors looking to position for structural growth. This fund allows us and our clients to harness the power of investing towards preserving our planet for the next generation and gaining exposure to the sectors set to lead the way.” 

The Multi Manager Access II – Future of Earth fund is available in jurisdictions including Austria, Belgium, Denmark, Finland, Germany, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, and the UK.

Columbia Threadneedle adds two equity funds to sustainable range

20 May 2021

Columbia Threadneedle Investments has added two new sustainable funds to its Sustainable Outcomes range.

The Columbia Threadneedle (Lux) Sustainable Outcomes Global Equity fund and the Columbia Threadneedle (Lux) Sustainable Outcomes Pan-European Equity fund focus on themes drawn from the SDGs and are assessed by the firm’s own responsible investment ratings.

Pauline Grange, portfolio manager of the Columbia Threadneedle (Lux) Sustainable Outcomes Global Equity fund, said: “As active investors, we encourage firms to adjust practices and innovate for solutions – not just to manage ESG risk, but to also create opportunities to deliver positive change aligned to the SDGs. Importantly, those companies must be consciously thinking about, and acting on their impact.”

The strategy underlying the Columbia Threadneedle (Lux) Sustainable Outcomes Global Equity has already been running as a separate strategy for institutional clients.

Andrea Carzana, portfolio manager of the Columbia Threadneedle (Lux) Sustainable Outcomes Pan-European Equity fund, said: “Investor demand for sustainable equities is a structural shift supported by governments and society to address environmental and social issues. Companies are on the path to more sustainable governance, operations and products. We will direct capital to those companies with the strategy, will and potential to enable these shifts.”

Aviva Investors unveils climate transition credit fund

13 May 2021

Aviva Investors has launched a global credit fund investing in companies offering goods and services for climate change mitigation.

With a $350m capital allocation from the firm’s UK multi-asset range and the Aviva Ireland multi-asset portfolio, the Climate Transition Global Credit Fund will back companies the team identifies as best placed to transition to a warmer, lower carbon world.

The fund will be co-managed by portfolio managers Tom Chinery and Justine Vroman and climate specialist Rick Stathers.

It is aligned with the UN’s Sustainable Development Goals, excludes fossil fuel companies and and targets solutions providers that generate current or future material revenue by addressing climate-related themes, such as the shift to renewable energy sources, sustainable transport and more environmentally-conscious lending.

The firm said it also aims to capture transition-oriented companies with low decarbonisation and physical impact risk, extending the investment universe beyond businesses with obvious green credentials.

It will be predominantly exposed to investment grade companies with a small allocation of up to 5% in high yield bonds, and benchmarked against Bloomberg Barclays Global Aggregate Corporates Index.

Colin Purdie, CIO for credit at Aviva Investors, commented: “We can’t pivot to a lower carbon world if all we do is rule out the poor performers and only invest in companies that provide solutions to climate change. All companies need to adjust for a warmer, lower carbon world, which is why we felt it was important to use a wider transition lens to capture a larger set of businesses beyond those with obvious green credentials.

“As investors, it is our responsibility to look beyond small pockets of green finance to engage and mobilise the liquidity of the wider credit market to assist in climate transition and the achievement of net zero carbon emissions. Companies that don’t adjust their business models will be less attractive to investors and will present a less compelling investment case over time. Climate laggards may find that their financing becomes more expensive than that available to climate leaders.”

Aquila Energy Efficiency Trust seeking £150m for IPO

15 May 2021

An investment trust investing in a portfolio of energy efficiency projects in the Europe and the UK has been slated for launch in June, listed on the London Stock Exchange.

The Aquila Energy Efficiency Trust is seeking to raise £150m ahead of its IPO which will be deployed into companies exposed to energy efficient lighting, smart building and metering services, cogeneration plants, heating, ventilation and air conditioning (HVAC) systems, efficient boilers, solar photo voltaic plants batteries, other energy storage solutions, electric vehicles and associated charging infrastructure.

With Aquila Capital acing as the investment adviser, the trust will not invest in fossil fuel extraction or mineral extraction projects with investments overall aiming to seek to reduce primary energy consumption, reduce CO2 emissions and in many cases deliver economic savings and other benefits to the counterparties including improved air quality, a statement said.

Companies of up to €10m market cap will make up the majority of the portfolio but larger investments may be made where possible.

Commenting on the launch, Chair of Aquila Energy Efficiency Trust PLC, Miriam Greenwood, said: It gives me great pleasure to announce Aquila Energy Efficiency Trust’s intention to float on the London Stock Exchange with an IPO that we believe offers a highly differentiated investment opportunity.

 “The company will allow investors to access a leading European investment manager with considerable experience in the sector and a diverse pipeline focused on proven technologies across the European Economic Area, the UK, and Switzerland. The company is intended to assist corporates in stepping forward to play their part in addressing the major challenges facing the planet from climate change, supporting important and ambitious national targets across the region to reduce CO2 emissions.”

Tribe backs BlueBay impact bond launch

Fixed income asset manager BlueBay has launched an impact bond investing in companies making a positive contribution to people and the planet, with impact wealth manager Tribe Impact Capital as early supporters.

The UCITS fund, named the BlueBay Impact-Aligned Bond Fund, is categorised under Article 9 of the Sustainable Finance Disclosure Regulation (SFDR). It will focus on companies whose core economic activities offer investment opportunities and contribute to addressing global environmental and social challenges like climate change and inequalities, framed around seven sustainability themes. These are:

People/social themes

  1. Achieving an inclusive society
  2. Building knowledge and skills
  3. Ensuring good health, safety and well-being

Planet/environmental themes

  1. Enabling a circular economy
  2. Ensuring clean and plentiful water
  3. Promoting clean and safe energy
  4. Promoting sustainable mobility and infrastructure

Managed by partner and senior portfolio manager, Tom Moulds, head of ESG investment and portfolio manager, My-Linh Ngo and portfolio manager, Harrison Hill, the fund offers daily liquidity and will predominantly invest in developed market investment grade corporate bonds, as well as some high yield and emerging market bonds.

Chief impact officer at Tribe and editorial panellist for ESG Clarity Amy Clarke said: “We’re pleased to support BlueBay in the launch of their Impact-Aligned Bond Fund. This innovative strategy builds on BlueBay’s growing commitment to sustainable investing, and we’re thrilled to see them bringing their successful track record in credit to the impact arena. We hope this demonstrates to both the market and investors that a focus on responsible and sustainable business can contribute to and enhance the credit selection process.” 

BlueBay’s My-Linh added: “To date, this style of investing has largely been limited to listed equities. Widening this opportunity set to fixed income is critical from a sustainability perspective. For one, the absolute size of the debt market dwarfs that of equities, so in our view if you want to make an impact you need to think beyond stocks alone. Furthermore, we see many of the activities that need to be financed to enable the sustainability transition are going to be more attractive to fixed income investors rather than equity.”

Lombard Odier launches four funds for net zero transition

5 May 2021

Lombard Odier Investment Managers has unveiled four ‘TargetNetZero’ strategies, covering both equities and fixed income, which the group said will help accelerate the transition to a more sustainable economy.

The group said the strategies will progressively accelerate the rate of decarbonisation of companies within the portfolio to target net zero CO2 emissions by 2050, which is aligned with the more ambitious objective of the Paris Agreement of limiting global warming to 1.5°C.

Investing in equities, the TargetNetZero Global Equity and TargetNetZero European Equities strategies are low tracking error strategies that tilt the MSCI World and MSCI Europe indices towards companies in climate-relevant sectors that are “aligning to the Paris Agreement through rapid decarbonisation”. The firm highlighted that while these some of these companies may be misinterpreted as laggards by investors who only consider a company’s current footprint, it is important to focus on the trajectory it is on and the targets a company may have set. 

However, the strategies will tilt away from companies in high-emitting sectors that remain poorly aligned to the transition ahead and are likely to contribute to higher levels of global warming.

On the fixed income side, the TargetNetZero Global Investment Grade Credit and TargetNetZero Euro Investment Grade Credit strategies are high tracking-errorcredit strategies focused on emissions-reducing companies aligned with the Paris Agreement. Lombard Odier said the strategies target a higher level of yield than the investment grade index.

Dr. Christopher Kaminker, head of sustainable investment research, strategy and stewardship at Lombard Odier commented: The race to net zero has started, with nearly 80% of the global economy now subject to a net zero target – a stunning acceleration from 16% last year. Increased policy ambition is set to follow in the months ahead and powerful economic and market forces are now creating and destroying value across markets. As signatories of the Net Zero Asset Managers initiative, we are committed to the development of new solutions that enable clients to position capital to capture value and hedge the risks that lay ahead.”

“We recognise that to get to net zero, we cannot merely shy away from the more difficult, hard-to-abate industries. Rather, we must seek to identify those players that are emerging as the champions of the transition ahead in each of their respective sectors. Doing so requires diversified strategies that are able to distinguish the leaders from the laggards, and re-deploy capital accordingly.”

PIMCO introduces income product

5 May 2021

PIMCO has added a fixed income product to its ESG range focusing on producing a high and consistent level of dividend income for investors.

The PIMCO GIS ESG Income Fund will join the GIS ESG Fund suite, which also includes the GIS Global Bond ESG Fund, the GIS Emerging Markets Bond ESG Fund, and the GIS Climate Bond Fund, among others.

It will be managed by a team of senior portfolio managers including Joshua Anderson, Jing Yang, Jelle Brons, Dan Ivascyn and Alfred Murata.

The group said the fund will have a global, multi-sector approach, but with ESG integrated into the investment process for those who want to pursue income from more sustainable sources.

Group CIO Ivascyn said: “The addition of the PIMCO GIS ESG Income Fund brings PIMCO’s leadership in income investing to clients who want a unique, dedicated ESG strategy.”

BlackRock launches ESG world equity fund

28 April 2021

BlackRock has launched a new ESG world equity fund.

Its Authorised Contractual Scheme (ACS) World ESG Insights Equity Fund groups ESG data into 15 descriptors, which are then mapped against sectors to produce company ESG scores. The fund is also aiming for a 50% reduction in carbon intensity compared to the FTSE Developed Index.

It will be managed by Jonathan Adams and Andre Bertolotti who will draw research insights from BlackRock’s sustainable investing team.

Sarah Melvin, head of UK at BlackRock, said: “With the significant reallocation of capital to companies with more sustainable practices already under way, pension schemes, insurers, and wealth platforms are asking for our help to realise this historic investment opportunity. This launch marks another milestone in our sustainability offering to help savers build their pension and long-term investments in companies with a positive ESG profile.”   

Amundi adds fixed income fund to climate ETF range

27 April 2021

Amundi has expanded its Climate ETF range with a launch of a Paris-aligned fixed income fund.

Amundi iCPR Euro Corp Climate Paris Aligned PAB – Ucits ETF is listed on Xetra and has an ongoing charge of 0.16%.

With the launch of this fund the firm’s Paris-aligned ETF range now contains exposure to Euro Corporate fixed income as well as Eurozone, European, and global developed equity markets. All ETFs in the range are classified under Article 9 of SFDR.

Fannie Wurtz, head of Amundi ETF, indexing and smart beta, said: “The launch of this ETF illustrates our unwavering commitment to developing simple, ready-to-use tools that help investors to implement their ESG and climate strategy depending on their objectives and constraints. We believe that ETFs have a critical role to play in driving the transition to a low carbon economy.”

BlackRock ups sustainable Ucits range to $50bn with two new ETFs

26 April 2021

BlackRock has launched two new Paris-aligned ETFs, bringing the iShares Sustainable Ucits range to more than $50bn in assets.

The iShares S&P 500 Paris Aligned UCITS ETF (UPAB) and the iShares MSCI World Paris Aligned UCITS ETF (WPAB), aim to reduce exposure to transition and physical climate risks, capture opportunities arising from the transition to a lower-carbon economy, and screen out exposure to businesses involved in activities such as oil and gas, thermal coal, controversial weapons, high carbon electricity generation and social norm violators.

Manuela Sperandeo, BlackRock’s EMEA head of sustainable indexing said: “As the low-carbon transition continues to transform market return expectations, we believe clients are best served by being at the forefront of that transition. This will require investors to embrace new strategies, and ETFs are playing a central role as foundational building blocks for people seeking out affordability, transparency, and convenience. Our focus remains on providing a broad and deep set of sustainable investment tools that help investors make informed choices.”

The iShares S&P 500 Paris Aligned UCITS ETF tracks the S&P 500 Paris Aligned Climate Sustainability Screened Index, while the iShares MSCI World Paris Aligned UCITS ETF tracks the MSCI World Climate Paris Aligned Benchmark Select. 

Reid Steadman, global head of ESG at S&P Dow Jones Indices said: “We are very pleased that BlackRock has licensed the S&P 500 Paris-Aligned Climate Sustainability Screened Index to launch a new exchange-traded fund for the European market. The index’s design aligns with the principles of the landmark Paris Agreement and incorporates factors to manage transition risks and capture climate change opportunities. As global investors’ appetite for more sustainable products grow, there is also a need for independent, reliable and transparent benchmarks to measure companies’ ESG performance as we move towards a low carbon economy.”

Remy Briand, head of ESG at MSCI said: “The MSCI Paris Aligned Benchmark Select Indexes are intended to support the needs of investors with investment strategies that aim to mitigate climate transition and physical risks through the decarbonisation of the economy while being compatible with the Paris Agreement. MSCI recently called on asset managers to scale up the availability of investment options aligned with a net-zero trajectory as a means to accelerate the flow of capital for the net-zero revolution. We believe this will help tackle the single greatest challenge humankind has faced and ignite a new era of sustainable growth.”

Brewin Dolphin launches sustainable MPS for IFAs

22 April 2021

Wealth firm Brewin Dolphin will roll out a managed portfolio service (MPS) for IFAs, which will be aligned to sustainability principles.

The firm said the range will comprise five model portfolios designed to maximise returns from income and capital growth.

The portfolios will be made up of funds that exclude exposure to “controversial sectors” and are invested in companies that have a positive social or environmental impact. Such funds will go through a three-stage selection process, including:

  • Exclusion: not invested in companies involved in tobacco, weapons, thermal coal, gambling, and adult entertainment;
  • ESG leaders: funds that set industry standards in integrating ESG factors into investment decisions and stewardship activities; and,
  • Impactful companies: funds invested in firms that positively and measurably contribute to social and environmental challenges.

The five portfolios – called Income, Income Higher Equity, Balanced, Growth, and Global Equity – will be rebalanced each month and will be mapped to all the main risk profilers, Brewin said.

The DFM charge will be the same as the current MPS models at 0.30% with an estimated total charge of between 0.54% and 0.76%.

At launch, the Sustainable MPS will be available on several platforms including 7IM, Aegon ARC, The Aegon Platform, AJ Bell, Aviva, Hubwise, Novia, and Standard Life Wrap.

Evolving client needs

Robin Beer, chief executive of Brewin Dolphin, said: “We are proud of our approach to responsible investment, based on ESG integration and active ownership, which underpins our existing MPS product.

“However, we realise that clients’ needs are always evolving. Sustainable MPS meets the needs of IFAs’ clients that want more – by excluding harmful sectors and by investing in sustainable funds and companies which contribute positively to society and the environment.”

Tom Blathwayt, head of sustainability at Brewin Dolphin, said: “It is important to measure and monitor the impact of a sustainable portfolio given the global challenges we all face. We also want to assess our objective of investing in companies and funds that have a positive societal or environmental impact.

“Transparency is really important and have decided to use a third party, MSCI, to provide an independent assessment of the ESG risk, carbon intensity and SDG alignment of our portfolios.”

Hargreaves adds ESG funds to Wealth Shortlist

22 April 2021 

Hargreaves Lansdown is looking to beef up the number of ESG funds on its Wealth Shortlist following a surge in client demand but has been called out for being late to the party.

The D2C giant announced it would be adding the Janus Henderson UK Responsible Income and the Trojan Ethical Income funds to its revamped best buylist, lifting the number of responsible investment funds on its 71-strong shortlist from three to five.

Dominic Rowles, investment analyst at Hargreaves Lansdown, said that investing with ESG considerations in mind is “simply good risk management,” adding that investors should be looking to fill their portfolios with companies which deliver sustainable revenues, profits and dividends.

Hargreaves customers plough record levels of cash into responsible funds

Rowles said the D2C giant was responding to the surge in demand for ESG products. Citing data from the Investment Association, he noted UK savers poured almost £1bn a month on average into responsible investment funds last year.

This trend was mirrored across Hargreaves Lansdown’s own clients who ploughed a record level of cash into responsible funds in 2020, with net flows over 4,000% higher than in 2016.

“As a result of that feedback, we’ve committed to covering more responsible investment funds and today we’re announcing two additions to the Wealth Shortlist – we expect to see more added to the list over time,” Rowles said.

DIY platforms have typically been slow to ride the ESG wave

Holly Mackay, founder of Boring Money, believes Covid-19 accelerated the move to sustainable investing as it triggered an “emotional response,” as well as a “reassessment of lifestyles and priorities”.

She points out that 2020 was a “very good year for the cold hard cash proof points of sustainable investing” as these funds “typically did pretty well”.

However, Mackay commented that “DIY platforms have typically been surprisingly slow to ride this wave and help their customers pick funds that map to their preferences and priorities”.

She believes that Hargreaves Lansdown is “playing catch-up and realigning their research focus with what investors in 2021 actually want to see”.

‘They will have seen Baillie Gifford Positive Change has crept into the best sellers’

Clive Waller, managing director of CWC Research, said “the important thing is the direction of travel” but that “client pull is the driver” behind this move.

“They will have seen that Baillie Gifford Positive Change has crept into the best selling funds lists, demonstrating that direct fund buyers are taking note,” he said.

Rowles highlighted that income is hard to come by for responsible investors as 70% of all UK Equity Income funds invest in tobacco companies, over 80% have a holding in the oil and gas sector, 78% own mining shares and around half invest in aerospace and defence businesses.

“Funds that avoid these areas while also aiming to generate a reasonable level of income are few and far between – but they are out there.”

He adds that the lack of exposure to typical equity income hunting grounds means responsible investment funds will perform differently to their traditional counterparts at times and could act as a portfolio diversifier.

The £290m Trojan Ethical Income fund managed by Hugo Ure returned 23% over three years according to Trustnet, while the £310m Janus Henderson UK Responsible Income fund managed by Andrew Jones returned 17.3% over three years, compared to the IA UK Equity Income average of 7.2%.

Eurazeo launches sustainable maritime fund

20 April 2021

Eurazeo has launched a sustainable maritime fund to finance infrastructure and technology in the sector, as well as help transition to a low-carbon economy.

The Sustainable Maritime Infrastructure thematic fund will support around 50 European facilities that will back the transition of the maritime economy to become carbon neutral by 2050 and in line with the ambition announced in the European Green Deal. The fund has a target size of €300m.

“Currently, 90% of the world’s goods are transported by sea”, the firm said. “Therefore, the decarbonisation of the maritime sector is crucial to the fight against climate change. To meet this challenge, the fund will mainly finance three types of infrastructure: ships equipped with advanced technologies that negate or curtail environmental harm, innovative harbor equipment, and assets that contribute to the development of offshore renewable energy.”

See also: – Investor letter to UN calls for action on ‘humanitarian crisis at sea’

It added with the new International Maritime Organisation (IMO) regulation to reduce the sulphur content of fuels from 3.5% to 0.5%, which came into force on 1 January 2020, the  fund will contribute to the reduction of GHGs as well as sulphur oxides (Sox) and nitrogen oxides (NOx) emissions, which are particularly harmful to air quality.

The emissions reductions achieved by the fund’s investments will be measured through quantitative indicators.

Sylvain Makaya, partner at Eurazeo, said:Our new fund is a financing tool that will contribute to the reduction of greenhouse gas and sulphur, reduction measured audited by independent experts, then communicated to our investors. Its implementation, the process of which has been evaluated with full transparency by independent organisations, underlines our aims and ambitions to deploy meaningful funds that provide a response to the environmental and climatic challenges of our time.”

CPR AM launches new climate equity and bond funds

15 April 2021

CPR AM, the thematic equities arm of European asset manager Amundi, has launched two new climate funds: an equity and a bond fund.

CPR Invest – Climate Action Euro, managed by Alexandre Blein, is an equity fund investing in all sectors in the Eurozone. It initially excludes 36% of the 471 MSCI EMU Index companies scored by CDP.

CPR Invest – Climate Bonds Euro, managed by credit manager Antoine Petit and head of treasury and credit solutions Julien Levy is a Euro-denominated investment grade bond fund active across all sectors, OECD countries, maturities and seniorities, targeting companies excelling in decarbonising across the credit spectrum, not just the green bond market. It excludes 35% of the initial universe of 925 issuers. The fund also invests in the BB segment.

Gilles Cutaya, deputy CEO of CPR AM, said: “These funds are a direct response to investors’ demands to decarbonise their portfolios and consolidate the range of solutions that CPR AM is able to offer them across all main asset classes. CPR AM’s climate range already has more than €1 bn in AUM and we continue to reinforce our ambition to become the leading climate partner for investors for years to come.”

Both funds use CDP’s scoring methodology, which the firm also uses for its climate action fund. This rates companies from A to D on their transparency and their efforts in tackling climate change. CPR’s climate fund hold companies rated A or B, and C only in cases where the company has a science-based target.

Laurent Babikian, director capital markets at CDP Europe, said: “These investments – based on the best CDP scores and science-based targets – bring to the market more credible investment solutions to the climate crisis based on the best available data. They will help finance the transition to a net-zero emissions economy.”

Vontobel launches article 9 green bond fund

14 April 2021

Vontobel has launched a green bond fund, which qualifies as article 9 under the Sustainable Financial Disclosures Regulation.

The Vontobel Fund – Green Bond is managed by Daniel Karnaus and Anna Holzgang and is stringent about which green bonds are eligible for investment. The firm said it has been launched to meet client demand.

Climate change is a real financial risk for investors, and green bonds provide an effective tool to address it,” Karnaus said. “The fund’s impact is also measurable. For every 1 million euro invested in the fund, we estimate that we reduce carbon emissions equivalent to 492 t CO2 equivalent, or about 206 fewer passenger cars on the streets per annum.”

AXA rebrands women’s fund to social progress fund

10 April 2021

AXA Investment Managers is widening the scope of its women empowerment fund to include broader social issues.

The AXA WF Framlington Women Empowerment Fund, which was launched in 2017, has become the AXA WF Framlington Social Progress Fund and will now focus on more of the UN SDGs and invest in companies addressing a range of social needs.

Still managed by Anne Tolmunen, the strategy will focus on access to affordable housing, essential infrastructure, and financial and digital inclusion; protection through healthcare solutions and safety; and progress through education, entrepreneurship and wellbeing.

Tolmunen said: “The economic empowerment of women will continue to form a critical area of focus within the Social Progress fund, while promoting gender diversity in the workplace will continue to be a cornerstone of AXA IM’s active ownership agenda addressed through our reinforced engagement and voting capabilities and other initiatives such as the 30% Club Investor Group in France and in the UK”.

See also: – French investors engage companies on gender diversity

The fund is part of AXA IM’s ACT fund range and it classified as an article 9 fund in the Sustainable Financial Disclosures Regulation. The firm said 5% of the management fees paid by the fund will continue to be donated by AXA IM to several charities supporting education (Epic Foundation), biodiversity and climate and health initiatives (Access to Medicine Foundation) among others.

Rathbones launches sustainable multi-asset range

29 March 2021

Rathbones has launched a new range of sustainable multi-asset funds to meet client demand, according to manager Will McIntosh-Whyte.

McIntosh-Whyte will be joined by head of multi-asset David Coombs as managers on the four funds, with input from Rathbone Greenbank head of ethical, sustainable and impact research Kate Elliot.

The range comprises the Rathbone Greenbank Dynamic Growth Portfolio, which targets an annual return of 4% higher than inflation; the Rathbone Greenbank Strategic Growth Portfolio, which targets 3% above inflation; the Rathbone Greenbank Defensive Growth Portfolio, which targets 2% above inflation; and the Rathbone Greenbank Total Return Portfolio, which targets a 2% return above the Bank of England base rate.

The range will use the same processes as the firm’s other multi-asset ranges but applies a sustainable overlay. But McIntosh-Whyte was quick to assure ESG Clarity this doesn’t make other ranges ‘unsustainable’.

“People’s values differ, some people aren’t on that [sustainability] journey,” he said. “We still consider ESG risks in our existing multi-asset ranges.”

Amundi revamps green bond fund to align with ‘Just Transition’

13 April 2021

Amundi has revamped an existing European fixed income portfolio to focus on investing in companies supporting the energy transition while meeting criteria that consider social cohesion.

The Just Transition for Climate Fund was previously called the Amundi Responsible Investing– Green Bonds, and was launched in 2015 with an objective to fight global warming. Amundi, the European asset manager with €1.7trn in assets under management, said transforming the fund into a strategy focusing on the Just Transition is based on the conviction that the energy transition must not be to the detriment of social issues. The portfolio will hold companies selected for their commitment to environmental and social objectives that live up to the ambitions announced in the Paris Agreement, the group added.

Furthermore, the revamped fund will be:

  • Fully aligned with the energy transition, incorporating an objective to reduce the carbon footprint;
  • Socially inclusive, by integrating a ‘Just Transition’ score incorporating the different social aspects involved in the transition to a low-carbon economy: impact on employees, consumers, local communities and society at large; and
  • Dynamic and forward-looking, through its tailor-made engagement policy to support issuers in their transition in line with the environmental and social objectives of the strategy.

Amundi’s Just Transition scoring system has been designed to attribute scores which measure the performance of bond issuers relative to their peers on specific social issues. Each dimension is then weighted according to their importance in the social acceptability of the transition toward a low carbon economy.

See also: – Snowball’s Daniela Barone-Soares: We need a just recovery from Covid-19

The fund’s financial objective is to outperform the Bloomberg Barclays Euro Aggregate Corporate Index but the management team must also maintain a carbon footprint 20% lower than the benchmark.

Jean-Jacques Barberis, head of the institutional and corporate clients division & ESG at Amundi, commented: “Within the Paris Agreement, the concept of a fair transition is central to the transformation to ‘net zero’ economies. There will be no transition if it is not socially acceptable. The social dimension of the transition is therefore becoming increasingly important for investors. The Just Transition for Climate fund is the first attempt to provide investors with a unique solution to measure and integrate the financial risks associated with climate change and use their investments for an inclusive transition in line with the Paris Agreement. The methodology will progressively evolve based on our dialogue with corporates.”

Invesco relaunches European fund with ESG focus

13 April 2021

Invesco has also refreshed an existing product to focus on ESG: the group’s Invesco Pan European Structured Equity Fund is to be renamed the Invesco Sustainable Pan European Structured Equity Fund and will have ESG embedded into its strategy.

See also: – Invesco UK’s Stephanie Butcher: ‘ESG is the movement of our age’

The fund, which has been in existence as a European low volatility strategy for 15 years, is managed by Thorsten Paarmann and Alexander Uhlmann in Frankfurt. They will apply ESG criteria to the factor-based style the strategy adopts. The fund takes a quantitative approach to investing with the aim to achieve superior risk-adjusted returns, from intended factors Momentum, Quality, Value and Low Volatility.

Under the new ESG criteria, 40% of the managers’ previous investment universe is now excluded. Companies now banned from the portfolio are those that engage in controversial activities, such as those involved in fossil energy sources, weapons and nuclear power, and the managers will also apply a best-in-class screening to highlight energy transition measures for the stocks making the most progress in this area.

Fund manager Paarman said: “Research and evolution is at the heart of what we do at Invesco Quantitative Strategies (IQS) and has been for more than 30 years. As our research deepens, we constantly evolve alongside our clients, believing there are new risks and opportunities that can provide better protection to the fund. This is why we’ve made the decision to make changes to the fund’s strategy and to embed ESG criteria explicitly into the existing process.”

Recent Morningstar data highlighted an increasing number of funds were being repurposed and rebranded into sustainable funds, with at least 250 vehicles being transitioned in Europe in Q4 2021 alone.

Artemis targets early-stage disruptors for global equity fund

6 April 2021

Artemis Fund Managers has launched a global equity fund to invest in companies addressing challenges to sustainability.

The Artemis Positive Future Fund contains 35-45 early-stage quoted companies selected for their potential to “disrupt inefficient, outmoded business models”, the firm said.

“The best long-term opportunities for growth lie in companies that are addressing the challenges of sustainability,” said Craig Bonthron, one of the managers of the fund. “Our aim is to identify emerging companies that are doing this and that are poised to displace incumbents.”

Bonthron is joined by Neil Goddin, Jonathan Parsons and Ryan Smith in managing the fund. The four previously managed the Aegon Global Sustainable Equity Fund.

The fund aims to outperform the MSCI AC World (TR) index.

NNIP adds sovereign green bond to fund range

1 April 2021

NN Investment Partners (NNIP) has added a sovereign green bond fund to its range of green bond funds.

The NN (L) Sovereign Green Bond fund aims to have a positive environmental impact through the projects it finances, with a specific focus on treasury and government-related bonds.

The firm now offers a full range of green bond funds: aggregate, corporate, sovereign, and an option for a fund with a shorter duration. It said the new sovereign fund offers investors greater flexibility.

Bram Bos, lead portfolio manager green nonds at NNIP, said: “I am proud to be part of the development of an asset class that will play a key role in financing climate change mitigation and supporting the environment.

“In the past, investor demand for green bonds mainly came from impact investors, we now see more typical fixed income investors allocating to green bonds as well. These investors are looking to make their portfolio more sustainable without sacrificing financial performance. Offering a broad range of green bond strategies makes this even easier, as it allows them maximum flexibility to allocate to green bonds that replicate the characteristics of traditional bonds in their portfolio.”

BlackRock unveils two green bond ETFs

29 March 2021

BlackRock has expanded its sustainable iShares range with two fixed income products.

It has launched the iShares € Green Bond UCITS ETF, and the iShares Global Govt Bond Climate UCITS ETF, in what the firm said is an industry first.

The iShares € Green Bond UCITS ETF tracks the Bloomberg Barclays MSCI Euro Green Bond SRI including Nuclear Power Index offering exposure to over 300 euro-denominated investment grade green bonds from 160 issuers across four sectors of the fixed income market. BlackRock said it will publish proprietary portfolio impact reports on the environmental benefit of the underlying holdings.

Secondly, the iShares Global Govt Bond Climate UCITS ETF offers investors cost effective exposure to government bonds whilst incorporating climate risk, said BlackRock. It tracks the FTSE Advanced Climate Risk Adjusted World Government Bond Index and offers exposure to global government bonds, taking the FTSE World Government Bond Index as a starting point. This index adjusts country weights based on a forward-looking assessment of climate risk faced by sovereigns using three pillars; physical risk, transition risk and resiliency to climate change.

Brett Olson, head of fixed income iShares in EMEA for BlackRock, said: “We are committed to helping investors build sustainable portfolios that align with their specific goals. The AUM of our iShares EMEA fixed income range has grown by around 29% in the past year, as investors are increasingly using them as transparent, efficient building blocks to access the bond market sustainably.”

Both ETFs have a TER of 20bps.

Fidelity launches sustainable active ETFs

29 March 2020

Fidelity International has also added to its sustainable bond range with two active ETFs.

The group has launched the Fidelity Sustainable Global Corporate Bond Multifactor UCITS ETF and Fidelity Sustainable USD EM Bond UCITS ETF. The former uses Fidelity’s proprietary multifactor credit model combined with integrated sustainability criteria to choose global corporate bonds with potential for “enhanced idiosyncratic returns”. The group said the quantitative process considers a variety of sentiment, valuation, fundamental and ESG scores to deliver each bond issuers overall factor. The portfolio construction process then aims to generate alpha by selecting the most attractive bonds based on transactions costs and valuation metrics from those bond issuers with the highest multi-factor scores.

Meanwhile, the latter product, the Fidelity Sustainable USD EM Bond UCITS ETF, offers investors active exposure to sustainable emerging market sovereign debt through an enhanced weighting to countries most favoured by Fidelity’s emerging market debt factors heatmap, and an improved sustainable footprint based on Fidelity’s Sustainable proprietary ratings and external ESG ratings.

OCFs for the funds are 0.25% and 0.45% respectively.

Nick King, head of ETFs at Fidelity International, said:“Incorporating sustainable investing principles has become the key priority for many of our clients globally and we can now offer access to our proprietary research capabilities across asset classes in a transparent, cost effective structure.”

Vanguard adds global all-cap ESG ETF

29 March 2021

Vanguard has launched an ESG ETF investing in global companies across the cap spectrum.

The Vanguard ESG Global All Cap UCITS ETF tracks the FTSE Global All Cap Choice Index creating a portfolio of global equity exposure. Created by FTSE Russell, this index screens the FTSE Global All Cap Index for ESG criteria so that companies exposed to fossil fuels, gambling, tobacco, weapons and/or involved with controversies in relation to labour, human rights, environmental and anti-corruption standards, as defined by the United Nations Global Compact Principles, are not included.

Vanguard’s new ETF is managed by the group’s equity index team, which manages more than $4.8trn in assets across the globe and carried an OCF of 0.24%.

Aegon converts global equity fund into sustainable mandate

29 March 2021

Aegon has repositioned its UK-domiciled Global Equity Fund as a sustainable equity product.

The group said it will remain a concentrated, growth-focused global equity portfolio, that is unconstrained by geography or sector but will adopt a sustainable investment philosophy and criteria from 1 June 2021.

This follows the transition of the Dublin-domiciled Aegon Global Sustainable Equity Fund and investor demand for a UK-domiciled equivalent, which will be named the Aegon Sustainable Equity Fund.

In a statement, Aegon said consideration of ESG factors in the investment process has been a part of the strategy for some time but the formal change will mean each security will be subject to analysis from a sustainability perspective by the Aegon AM Responsible Investing team, who have the right to veto stocks from the portfolio.

Andrei Kiselev and Malcolm McPartlin will become managers of the Aegon Sustainable Equity Fund, and already manage the Dublin equivalent. Current managers Mike Nicol and Euan Weir will remain a part of Aegon’s equity team.

Stephen Jones, Global CIO Equities at Aegon Asset Management said: “We have seen strong demand for our responsible investment products and the update to our Global Equity Fund is borne out of client demand for a UK domiciled version of our Dublin-registered fund.”

Recent Morningstar data highlighted an increasing number of funds were being repurposed and rebranded into sustainable funds, with at least 250 vehicles being transitioned in Europe in Q4 2021 alone.

BMO GAM completes sustainable multi-asset range

16 March 2021

BMO Global Asset Management (BMO GAM) has added an adventurous and defensive multi-asset fund to its sustainable portfolio to cater to more risk appetites.

The BMO Sustainable Universal MAP Adventurous fund targets a return of CPI + 5% over five years and is in the IA Volatility Sector. And the BMO Sustainable Universal MAP Defensive fund targets a return of CPI + 1% over five years and is in the IA Volatility Sector.

The range, launched in December 2019, already consists of cautious, balanced and growth funds, and now has more than £100m of assets under management.

Rob Thorpe, head of intermediary distribution for UK and Europe at BMO GAM, said: “We’ve responded to demand and launched two additional sustainable funds, adventurous and defensive, to complete a comprehensive range of sustainable options, suiting most clients’ risk appetites, that are very well priced and fully actively managed.

“We believe the range is ideal for advisers seeking a well-costed active sustainable range as part of their Central Investment Propositions and for platforms or pension providers seeking sustainable default options.”

The investments are first selected from BMO GAM’s Responsible and Sustainable Opportunities strategies, which advocates avoiding assets with unsustainable practices and selecting those that make a positive contribution, while also engaging and voting on ESG issues.

In 2020, across the three portfolios, BMO GAM engaged with 107 companies, with 258 overall engagements in 18 countries. The team voted at 90 meetings, achieving 59 positive outcomes.

Simon Holmes, lead manager of the BMO Sustainable Universal MAP range, commented: “An active approach is important in maximising sustainability within an investment portfolio.”

All five funds in the Sustainable Universal MAP range have an ongoing charge capped at 0.39%. 

Invesco launches two ESG ETFs

15 March 2021

Invesco has launched two new ESG ETFs, bringing its total ESG ETF products launched this year to six.

The Invesco FTSE All Share ESG Climate UCITS ETF uses FTSE Russell’s target-exposure approach to create a UK equity portfolio with significant improvements in environmental characteristics.

The Invesco MSCI Europe ex UK ESG Universal Screened UCITS ETF aims to increase exposure to European companies demonstrating a robust and improving ESG profile, while reducing weight in those with below-average or worsening ratings relative to peers.

Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: “Flows into ETFs with an ESG objective continue to outpace those without one. As demand continues to broaden out, investors need a greater variety of exposures to tailor asset allocation and meet portfolio objectives. This year, we have started to see an upturn in demand for strategies with a similar profile to standard indices, but with a methodology that rewards companies’ demonstrating better ESG credentials and particularly regarding their impact on the environment.

Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, added: “While excluding the most controversial businesses, we wanted to make sure that we include companies that are capable of improving their ESG profile , reducing their impact on the climate and helping to solve the world’s environmental problems. Our position as an engaged and active owner of the stocks we hold in our portfolios, both passive and actively managed, allows us to encourage and promote positive change.” 

ETF details

ETF nameInvesco FTSE All Share ESG Climate UCITS ETFInvesco MSCI Europe ex UK ESG Universal Screened UCITS ETF
Index nameFTSE All Share ex Investment Trusts ESG Climate Select IndexMSCI Europe ex UK ESG Universal Select Business Screens Index
ETF tickerFASEESEU
Base / Trading currencyGBP / GBPEUR / GBP
Ongoing charge figure p.a.0.12%0.16%

Federated Hermes reclassifies ESG ranges and adds sustainable global equity fund

15 March 2021

The international business of Federated Hermes has launched a new Sustainable Global Equity Fund, the first in a new range.

The fund will be available in the second quarter of 2021 and sit in Federated Hermes’ new Sustainable category, which is now distinct from its Active ESG and Impact categories. Its investment process will encompass exclusions, proprietary sustainability scores and a thematic framework focused on four main areas: environmental preservation, social inclusion, health and wellbeing and efficient production and resource usage.

Martin Todd, lead manager of the fund, said, “Companies leading the sustainability transition have more than just excellent ESG profiles. Their activities directly contribute to a more sustainable future.”

Harriet Steel, head of business development, added: “We have seen a welcome and marked acceleration towards responsible and sustainable investing in the last year, with clients of all types reassessing their long-term objectives. The proliferation of related products has made it harder for investors to decipher and assess what is available to them. Aligning with EU regulation coming into force this year, the reclassification and expansion of our product range will offer transparency to clients and reflect the sustainable heritage and integrity of our firm.”

Aviva brings Stewardship Funds to UK wholesale market

15 March 2021

Aviva Investors has launched the OEIC feeder versions of the Aviva Stewardship Funds to bring the range to the UK wholesale market.

The firm said the funds aim to exclude companies that do not meet certain ethical standards or that harm society or the environment, support companies that make a positive contribution to society, and encourage better business practices through shared ownership and engagement.

Steve Waygood, chief responsible investment officer at Aviva Investors, said: “It’s now almost three years since Aviva Investors took over management of the Stewardship Funds and we’re delighted to take the stewardship story a step further by launching the OEIC feeder versions.  The philosophy of the range acknowledges that the products and services that companies provide can either help or hinder the development of a sustainable future. This new development will help provide even greater access to those who want their money to help power a transition to a more sustainable future.”

Launched in 1984, the Stewardship Funds currently have £2.5bn of assets under management and incorporate four funds:

  • Aviva Investors Stewardship UK Equity, managed by Trevor Green and Tom Grant
  • Aviva Investors Stewardship UK Equity Income, managed by Trevor Green and Tom Grant
  • Aviva Investors Stewardship International Equity, managed by Jaime Ramos-Martin
  • Aviva Investors Stewardship Fixed Interest, managed by Tom Chinery

Apiramy Jeyarajah, UK head of wholesale at Aviva Investors, said: “ESG and ethical investing is now more than ever a key focus for the asset management industry, and the launch of the OEIC feeders into our Stewardship Funds will give the UK wholesale market more flexibility and ease with which to choose to invest responsibly.”

First Trust launches global ESG ETF

11 March 2021

First Trust has launched a global ESG ETF aimed at wealth managers, discretionary fund managers, advisers and institutional investors.

Tracking the MSCI ESG Index, the First Trust Global Capital Strength ESG Leaders UCITS ETF evaluates issuers to include: a minimum three-month average trading volume of $5m, a minimum of $1bn in cash and short-term investments, long-term debt to market capitalisation ratio of less than 30%, as well as a return on equity of greater than 15%.

The portfolio is then adjusted to 50 stocks, taking into account short- and long-term volatility measures as well as country and sector concentration. These are then equally weighted, and ratings are reviewed between rebalancing dates.  

Rupert Haddon, managing director and head of sales at First Trust Global Portfolios said the fund blends to philosophies. “By selecting the best-performing ESG companies combined with the Capital Strength fundamental methodology, this new fund can provide investors with a sustainable competitive advantage and a superior long-term investment opportunity.”  

Axel Kilian, managing director, head of client coverage EMEA at MSCI, said: The MSCI ESG Leaders Indexes target companies that have the highest ESG rated performance in each sector of the parent index. The index suite utilizes MSCI’s award-winning ESG Research and ESG Ratings to identify companies that have demonstrated an ability to manage their ESG risks and opportunities and are therefore eligible for inclusion.” 

Aegon transitions growth fund into sustainable strategy

10 March 2021

Aegon Asset Management has turned the Aegon Diversified Growth Fund into a sustainable multi-asset investment strategy, and renamed it the Aegon Sustainable Diversified Growth Fund.

In January 2020 managers Colin Dryburgh and Robert-Jan van der Mark began transitioning the fund, initially through the global equity allocation, followed by the fixed income and alternatives allocations. The fund’s name and investment policy will change to reflect the sustainable focus, although the firm said the objective will remain the same.

Stephen Jones, global CIO of multi-asset and solutions, said: “The Aegon Diversified Growth Fund is already capitalising upon many of the sustainability-related shifts that are taking place globally. Incorporating a sustainable philosophy and practice will help us to capture opportunities and minimise unintended ESG-related risks.”

Subject to regulatory approval, Aegon Asset Management will also adopt a sustainable focus for the Dublin-listed Aegon Global Diversified Growth Fund.

GLA and Big Society Capital back property fund aimed at supporting London’s homeless

10 March 2021

Social impact investment company Resonance has partnered with a homelessness charity to launch a property fund to help meet increasing demand to house rough sleepers in London.

The group has joined forces with social landlord and charity Nacro to set up the new social impact homelessness property fund called Resonance Everyone In Limited Partnership.

It starts with an initial investment of £12.5m and target fund size of £15m. Greater London Authority (GLA) and Big Society Capital are among the first investors.

Resonance said there has been a rise in rough sleeping in the capital over the past year due to the pandemic, and nearly 15,000 people were temporarily accommodated in hotels to protect them from the risk of Covid-19.

The new fund will focus on purchasing affordable homes in London, with the aims of providing 50 homes for those sleeping rough on London’s streets and, while Resonance said it does not know the exact numbers because of tenancy length, it estimates over 200 people will be housed over the lifetime of the fund.

Mayor of London, Sadiq Khan said: “A secure, long-term home should be a basic right for every Londoner, but a decade of austerity and the economic crisis created by the pandemic means far too many people have found themselves on the street or in temporary accommodation.

“My teams and their charity partners are working around the clock to help the most vulnerable people to work towards a life off the street – but this is only possible if there is high quality, affordable accommodation available at the end of their journey. The work being carried out by Resonance and Nacro will create the homes our fellow Londoners deserve and ensure they have access to the support they need to rebuild their lives.

John Williams, investment director & head of property funds at Resonance, said: “This investment from the Mayor of London, Sadiq Khan, allows Resonance to extend its long running homelessness property fund initiative in London to help reach the specific and urgent need arising from the pandemic – helping provide move-on accommodation for individuals who have been temporarily housed in hotels and other emergency accommodation, and where there is now a historic opportunity to help prevent a return to the streets by providing a better way forward. 

“We are pleased to be working with Nacro as our charity partner on this initiative, who have significant experience of working with this tenant group and providing appropriate support to ensure successful tenancies and progression for individuals.”

Neuberger Berman launches pair of sustainable equity funds

10 March 2021

Neuberger Berman is adding two sustainable equity vehicles to its UCITS fund range investing on a global and European basis.

The Neuberger Berman Global Sustainable Equity and European Sustainable Equity funds will be led by Hendrik-Jan Boer, Alex Zuiderwijk and Jeroen Brand. They will typically consist of 30-60 stocks seeking to invest in “quality companies where sustainability reinforces returns”.

Lead portfolio manager Boer said: “Rapid societal and technological change is driving corporate evolution and creating value chain disruption. We are seeing increasing growth in what we call ‘conscious consumers’, who are holding corporations and governments to account through consumption behaviour, elections and activism. This coupled with active regulators implementing new directives across borders to address ESG issues is driving a new wave of high-quality opportunities for sustainable investors.” 

The team will work closely with the firm’s ESG investing team and be supported by a four-strong team of career analysts focused on bottom-up assessment with a value chain lens, across fintech & financial inclusion, energy transition, digital enterprise, conscious consumer, and access to healthcare.  

Quilter Cheviot unveils multi-asset Positive Change strategy

10 March 2021

UK wealth manager Quilter Cheviot has launched a multi-asset strategy investing in funds exposed to companies with more sustainable business practices and are making a positive contribution to the environment and society

The Positive Change strategy invest in funds across global equities, fixed income and alternatives focusing on how the management teams are on voting and engaging with their portfolio holdings.

Quilter Cheviot’s ESG fund research lead Melissa Scaramellini, commented: “We know that more solutions are needed to tackle the issues facing the environment and society and that the majority of companies need to take further action to become more sustainable.

“We want to encourage that positive change and believe this strategy brings a pragmatic approach to achieving that. We are excited to bring a strategy to clients that combines funds that invest in companies that are already making a positive contribution, along with funds managed by leading ESG practitioners that engage with companies to accelerate change where it’s most needed.”

Examples of companies that may feature in the new strategy include businesses leading healthcare advances or new technologies to increase energy efficiency.

Invesco adds clean energy ETF

2 March 2021

Invesco has launched a global clean energy product listed on the London Stock Exchange.

Available to European investors, the Invesco Global Clean Energy UCITS ETF will track the WilderHill New Energy Global Innovation Index which consists of global companies whose innovative technologies focus on the generation and use of cleaner energy, energy conservation, efficiency and the advancement of renewable energy.

Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, commented: “The biggest and arguably most urgent challenge facing the world is how to avoid climate catastrophe. The solution hinges on our transition to cleaner sources of energy, which is a diverse and rapidly evolving space. That is why we are so excited about offering investors access to the expertise of WilderHill. This California-based firm has been an industry leader since 2004 and constructed the first clean energy indices.”

He added the ETF will be exposed to companies focused in wind, solar, biofuels, hydro and other renewable energy sources as well as those involved in energy conversion, storage, conservation and efficiency. The ETF will also avoid companies with exposure to fossil fuels.

The ETF carries an ongoing charges figure of 0.60%.

LGIM launches climate-tilted index equity strategy for institutional investors

2 March 2021

Legal & General Investment Management (LGIM) has unveiled a low carbon transition fund range for pensions clients.

The LGIM Low Carbon Transition Index Equity Fund range will consist of climate-tilted index equity strategies seeking to significantly reduce its exposure to carbon emissions in alignment with 2050 net zero goals.

It will use LGIM’s climate scoring framework and will reduce initial exposure to carbon-emitting assets by 70% compared to the broad market capitalisation benchmark. The funds will also have significantly lower exposure to fossil fuel reserves and higher exposure to companies with green revenues.

LGIM has worked with the investment consultant LCP on the design of the strategy. Claire Jones, head of responsible investment for LCP and ESG Clarity editorial panellist said: “We’re delighted to have worked with LGIM on the design of this fund range to meet the needs of our clients. It enables pension schemes to manage their climate risk exposure by investing in low-cost equity funds that combine a large reduction in carbon intensity on day one, a commitment to reduce that intensity further over time, and strong stewardship.”

Stefan Jean-Luc Bilby, senior index distribution manager at LGIM, commented: “Addressing climate-related concerns is of paramount importance to our clients given growing regulatory pressures and the global shift towards net zero. We are thrilled to have launched the Low Carbon Transition Fund range; it offers investors an effective means to mitigate their climate risks using an innovative index approach.  This launch provides further evidence of LGIM’s commitment to helping clients position themselves for a shift to a low carbon economy within their investments.”

AJ Bell launches responsible MPS range as ESG demand ramps up

2 March 2021

AJ Bell platform Investcentre is launching a responsible managed portfolio service (MPS) to capitalise on client demand for ESG investment.

The range contains six risk-rated portfolios investing in cash, bonds, equities and alternatives.

Each portfolio will use ETFs and have a 25% allocation to the VT AJ Bell Responsible Growth fund, which the firm said gives “flexibility to make tactical allocation changes within the fund, rather than the rest of the portfolio, minimising clients’ potential capital gains tax liabilities”.

The carbon intensity of the balanced portfolio in the AJ Bell Responsible MPS is estimated to be 77% lower than the balanced portfolio in its Passive MPS.

The firm compared switching a £20k investment out of its passive MPS into the responsible MPS to “a high meat-eating couple going vegan”, while switching a £100k investment gives the same reduction in carbon emissions as planting 19 acres of forest in a year.

AJ Bell chief investment officer Kevin Doran said: “The demand for portfolios with a responsible investment approach has never been higher. Advisers have told us this is important to them and a growing number of their client so, in line with our commitment to offering advisers choice, we have expanded our MPS to include a responsible investment option.”

The responsible MPS will have an investment management fee of 0.15% with no VAT, as well as the normal platform charges. The balanced, moderately adventurous and adventurous portfolios will have an OCF of 0.46%, while the cautious and the moderately cautious will be 0.42% and 0.44% respectively.

Doran added: “All the portfolios have OCFs of under 0.5% per annum, so we believe this is giving advisers a highly competitive solution for clients that want to invest responsibly without sacrificing the potential for positive returns.”

AJ Bell’s platform has gained popularity over the last year, with customer numbers increasing by 31% in the 12 months up to 31 December 2020, according to their Q1 trading update. The platform’s net inflows increased by 67% to £1.5bn.

PGIM launches global ESG bond fund

25 February 2021

PGIM, the $1.5trn global investment management business of Prudential Financial, has launched the PGIM Global Total Return ESG Bond Fund with $25m assets under management. 

Managed by PGIM Fixed Income trio Robert Tipp, Michael Collins, and Matthew Angelucci, the PGIM Global Total Return ESG Bond Fund uses the firm’s proprietary ESG impact rating framework and is benchmarked against the Bloomberg Barclays Global Aggregate Index.

Tipp said: “While many global fixed income markets have rebounded since the lows of the coronavirus panic earlier last year, we expect volatility and confusion to remain high, creating opportunities to add value through active management. Our strategy combines global macro views and bottom-up fundamental research to identify the best fixed income opportunities globally.” 

The PGIM Fixed Income team has also recently hired Eugenia Unanyants-Jackson for the newly created role of head of ESG research. 

The ESG bond fund is the second dedicated ESG UCITS strategy offered to non-US investors, following the June 2020 launch of the PGIM Global Corporate ESG Bond Fund. 

Kimberly LaPointe, head of PGIM Investments’ international business, said: “Drawing on the active management expertise of PGIM Fixed Income, we are pleased to offer a flexible, global, multi-sector bond fund with an emphasis on holdings in higher-rated ESG issuers. While ESG factors are already integral to PGIM Fixed Income’s investment process, this fund, with its explicit ESG investment objective, adds to our suite of active fixed income solutions.” 

The PGIM Global Total Return ESG Bond Fund is a sub-fund of the Irish-domiciled UCITS fund umbrella, PGIM Funds plc. It will initially be registered for sale in Denmark, Norway, Sweden, UK, Germany, Austria, Netherlands, and Switzerland.                

BNPP AM restructures fund to focus on social inclusion

24 February 2021

BNP Paribas Asset Management (BNPP AM) has unveiled a fund investing in companies with a proactive approach to reducing social inequalities.

The group has restructured its Human Development Fund and renamed it as the Inclusive Growth Fund amid a shift to focus on reducing inequalities in income, education, gender, ethnicity, geographic origin, age or disability.

It has adopted a proprietary Inclusion Score to rate companies out of 100 to create a concentrated portfolio of 40 to 60 equities. It incorporates an enhanced weighting for social factors, which account for 65% of the overall score, compared to 20% for governance criteria and 15% for environmental.  Companies that score below 20 are automatically excluded from the investment portfolio.

The investment strategy is based on five key social challenges identified as major causes of inequalities:

• protecting the most vulnerable members of society

• promoting social mobility

• developing a quality offering accessible to the greatest number of people

• respecting business ethics

• promoting decarbonisation and biodiversity

Managers of the Inclusive Growth Fund, Maria Luz Diaz Blanco and Anne Froideval, commented: “By integrating specific performance indicators, such as employee turnover rate or board diversity, our proprietary model allows us to filter the investment universe to identify the leaders. Our approach means that we can build a high conviction equity portfolio of 40-60 stocks from around 1,000 companies initially analysed.  This allows us to meets the expectations of our clients who are looking to generate a positive impact on tomorrow’s society while generating long-term value.”

Amati launches specialist metals fund

24 February 2021

Amati Global Investors has launched fund investing in precious metal companies adopting a ‘Clean Trade’ approach.

Demand for specialist metals is anticipated to grow as the world transitions to a lower carbon economy and move away from fossil fuels. Amati gave examples as copper, which is used for power grid infrastructure as well as energy storage for industrial use, and battery technology which is dependent on lithium and electrification dependent on both nickel and copper.

Amati Founder and CEO, Dr Paul Jourdan  added although many investors see metal mining as a “dirty business” big changes are occurring in terms of emissions and employment practices, with many companies making a positive impact on local communities through their environmental and education programmes, and there is also a new emphasis appearing on lowering the carbon footprint of metal production. 

“The TB Amati Strategic Metals Fund will adopt a ‘Clean Trade’ approach [Jourdan is a Trustee of the charity], so if a country lacks so many of the basic freedoms that we cannot see the beneficial impact of a mine on the wider community offsetting the potential harm caused by the implicit funding of an oppressive government via taxes, we will not invest.  This is an approach that we are hoping will be adopted by investors on a wider scale.”

The TB Amati Strategic Metals Fund will hold 35-45 positions and be benchmarked agains the EMIX Global Mining Index. It will be managed by Georges Lequime and Mark Smith of UK-based London Investment Consultants.

New RM Funds impact credit fund targets £200m

22 February 2021

Alternatives asset manager RM Funds has launched a new impact credit fund aiming to raise up to £200m.

RM Impact Credit Fund (RM ICF) will fund UK businesses that make positive contributions to ESG outcomes linked to the UN Sustainable Development Goals. These funds will be offered through the provision of non-benchmark sized loans worth up to £15m, focusing specifically on social infrastructure and environmental infrastructure themes.

For example, the fund aims to improve the supply of quality affordable housing and accommodation; childcare and education services; health and social care, and the availability of energy, recycling, waste and sustainable water solutions and the sustainability of buildings and transport.

CIO James Robson said: “Despite being one of the world’s most advanced economies, the UK faces a range of pressing social and environmental challenges, not least arising out of growing social and economic inequality, meaning many people and parts of the UK are at risk of being ‘left behind’.

“There are many businesses across the UK which are still underserved by traditional lenders, with borrowing requirements that are too complex for traditional bank lending and too small for institutional direct lending. We are delighted to launch the RM Impact Credit Fund to fill this significant funding gap.”

The fund will actively engage with company management teams, use a positive screening process, and track impact metrics. Alongside the use of SDGs, the fund will have an impact scoring system aligned with recognised global standards and initiatives, including the Principles for Responsible Investment and the Impact Management Project.

RM Funds has partnered with The Good Economy (TGE) to provide third-party assurance of the Impact Management and Measurement framework. TGE will also report annually to investors to provide an independent view of the fund’s impact performance.

Robson added: “In addition to implementing a variety of investment protocols to protect our investors, we will also hold the fund accountable in upholding clear ESG standards; whether through our direct engagement with management teams, our use of SDGs through the positive screening process and the IMM scoring system, or our partnership with The Good Economy.”

LGIM adds to ESG bond range

18 February 2021

Legal & General Investment Management (LGIM) has launched a new green bond ETF.

L&G ESG Green Bond UCITS ETF tracks the J.P. Morgan ESG Green Bond Focus Index, which aims to provide exposure to green bonds issued across hard currency, credit and local currency government bonds. The fund incorporates a focus on green bonds that have been reviewed independently by the Climate Bonds Initiative. The portfolio of global constituents has an average credit rating of A+.

The fund also uses an ESG scoring and screening methodology, and allocates more money towards issuers ranked higher on ESG criteria and ‘Certified Climate Bond’ issues and invests less money in green bond issues that have not been reviewed independently. The range also excludes the lowest scoring bond issuers and certain industries such as controversial weapons manufacturers, thermal coal miners, tobacco companies, oil sands (from March 2021) and violators of the UN Global Compact.

The fund adds to the L&G ESG USD Corporate Bond UCITS ETF and L&G ESG Emerging Markets Corporate Bond UCITS ETF, which were both listed in January 2021. These three new ETFs have been designed for UK and European wholesale and institutional investors and are listed on the London Stock Exchange, Borsa Italiana and Deutsche Boerse.

LGIM said the eight funds in the range ‘address investors’ increasing need to gain exposure to core fixed income assets with ESG and liquidity considerations integrated into the investment design’.

Howie Li, head of ETFs at LGIM, added: “As with the rest of the range, we have designed these new ETFs to be portfolio building blocks that answer to investors’ increasing call for ESG integration and liquidity considerations.

“As questions mount on how ‘green’ some bond issues in the market may be, the incorporation of the Climate Bonds Initiatives certification process into the design means that we can direct more of an investor’s money towards green projects that have been independently verified.”

Key product details:

Fund nameIndexISINTERCurrencyTicker and Exchange
L&G ESG Green Bond UCITS ETFJ.P. Morgan ESG Green Bond Focus IndexIE00BMYDMD580.25%GBP      LSE – GBND LN Borsa Italiana – GBND IM Deutsche Börse – GBNB.DE
L&G ESG Emerging Markets Corporate Bond (USD) UCITS ETFJ.P. Morgan ESG CEMBI Broad Diversified Custom Maturity IndexIE00BLRPQP150.35%EUR  

EUR  

USD
GBP
Borsa Italiana – USDC IM
Deutsche Börse – USAB GY
LSE – USDC LN
LSE – USDC LN
L&G ESG USD Corporate Bond UCITS ETFJ.P. Morgan Global Credit Index (GCI) ESG Investment Grade USD Custom Maturity IndexIE00BLRPRD670.09%GBPLSE – USDG Borsa Italiana – USDC Deutsche Börse  – USAB

7IM offers advisers ESG options with responsible model portfolio range

16 February 2021

7IM has upped its ESG offering for advisers by launching Responsible Choice Model Portfolios. 

The five portfolios range in risk from cautious to adventurous and are focused on investments that score well on ESG factors, companies that can have long-term positive impacts, and will minimise exposure to controversial activities such as armaments, tobacco and thermal coal.

Verona Kenny, managing director of intermediary at 7IM said: “Green recovery and governance issues are quite rightly high on the global agenda, and the 7IM Responsible Choice Model Portfolios are designed to embrace the opportunities here and offer advisers an avenue to invest along sustainable lines, without having to sacrifice performance.” 

The 7IM Responsible Choice Model Portfolios will charge an annual management fee of 0.30%, with the ongoing charges of underlying holdings of around 0.40%. The new models are currently only available on the 7IM platform but will be available on third-party platforms in the near future. 

Manulife Sustainable Asia Bond Fund now available in Europe

15 February 2021

Manulife Investment Management has launched it Sustainable Asia Bond Fund in Europe.

Manulife Global Fund (MGF) Sustainable Asia Bond Fund makes use of the firm’s proprietary Asian credit research and ESG capabilities to select issuers to outperform traditional Asian bond peers.

The MGF Sustainable Asia Bond Fund is led by Murray Collis, deputy CIO, fixed income, Asia ex-Japan, and supported by the management team of Endre Pedersen, Alvin Ong, Jimond Wong and Neal Capecci.

The firm said sustainability of business in Asia is increasingly important to various investors and stakeholders, creating compelling opportunities for investment across Asia-Pacific markets.

“Sustainable and responsible investing is fast becoming one of the most important investment criteria globally,” said Pedersen.

The fund is domiciled in Luxembourg, and is available in Europe alongside two other Lux-based UCITS funds:  MGF Dragon Growth Fund and MGF Asia Total Return Bond Fund.

Andrew G. Arnott, head of wealth and asset management at Manulife Investment Management, United States and Europe, said: “We are excited to launch a fund that combines two of our strongest capabilities for clients who have interest in Asia and ESG integration in fixed income. Additionally, the availability of MGF Dragon Growth fund and MGF Asia Total Return Bond fund now offers a regional product suite for European investors looking to add diversity and exposure to their portfolio.”

The three funds are currently registered for sale in the UK, Germany, and Italy. Manulife Investment Management expects to file in Switzerland in the near term.

Amundi launches EM green bond fund

15 February 2021

European asset manager Amundi has launched an open-ended emerging markets green bond strategy offering investors yield potential from emerging market debt while supporting the energy transition in countries where it is most needed.

The Amundi Funds Emerging Markets Green Bond Fund has launched to retail and institutional investors seeking exposure to green bonds issued in hard currency, primarily by corporates as well as some sovereigns, in selected emerging markets, such as Brazil, India, China, and Indonesia.

It is run by Amundi’s emerging markets team with Maxim Vydrine, co-head of emerging markets corporate & high yield debt as lead portfolio manager, supported by Sergei Strigo and Paolo Cei as Co-portfolio managers. There will also be input from the EMs credit research and ESG analysis teams.

Amundi said it will seek to take advantage of the growth in green bonds, which saw a record $52bn of issuance in 2019, with total issuances reaching $24bn.

Yerlan Syzdykov, head of emerging markets at Amundi, said: “Investors are increasingly looking for solutions that deliver yield and have a positive impact on the environment. Emerging market green bonds are particularly well suited to capturing both of these opportunities.  We have already seen that 2019 was a vintage year for the global green bond market, and emerging market green bonds in particular are growing rapidly.”

Baillie Gifford launches positive change investment trust

11 February 2021

Baillie Gifford has launched the Keystone Positive Change Investment Trust, formerly known as the Keystone Investment Trust.

The trust aims to outperform the MSCI AC World Index and deliver positive change in areas such as healthcare, education, social inclusion and the environment. As at 31 December 2020, the trust’s assets were £239m.

The trust will be managed by Kate Fox and Lee Qian, assisted by senior impact analysts Michelle O’Keeffe and Ed Whitten. This team also manages the £1.99bn Baillie Gifford Positive Change Fund, which launched in January 2017.

The Keystone Positive Change Investment Trust is being transitioned in line with the Baillie Gifford Positive Change Fund, but will differ from the fund over time by incorporating private company investments and some smaller listed holdings.

James Budden, director of retail marketing at Baillie Gifford, said: “The alignment of Keystone with our positive change philosophy provides a compelling opportunity to access exceptional growth companies which are also contributing towards a more sustainable and inclusive world.”

JOHCM hires Fidelity duo for sustainable water fund launch

12 February 2021

Regnan, the responsible investment management business affiliated with J O Hambro Capital Management (JOHCM), has announced the launch of a global equities sustainable water and waste investment strategy later this year.

It has hired two fund managers, based in the JOCM London office from April, from Fidelity International to run the fund: Bertrand Lecourt, is joining as senior fund manager, and Saurabh Sharma as fund manager. The pair currently manage $2.5bn of assets within a sustainable water and waste strategy, including the $2.4bn Luxembourg-domiciled Fidelity Funds – Sustainable Water & Waste Fund and a $88m UK-domiciled OEIC fund. Both funds invest in companies involved in the design, manufacture or sale of products and services used in the water and waste management sectors, said Regnan.

Alexandra Altinger, JOHCM CEO – UK, Europe & Asia, commented: “We are thrilled that Bertrand and Saurabh are joining Regnan and the wider group to launch our first thematic sustainable investment strategy. Their decision highlights the attractions of Regnan’s responsible investment pedigree and the value of its unique sustainability research platform. The team’s appointment demonstrates our ability to attract superior talent and progresses Regnan’s plans to become a global leader in the provision of responsible investment strategies and solutions.”

Before joining Fidelity, Bertrand worked as a portfolio manager at Polar Capital and founded Aquilys Investment Management. Meanwhile, Sharma held equity research analyst roles at Moody’s Analytics and GlobalData prior to joining Fidelity.

RLAM launches Global Sustainable Credit Fund

12 February 2021

Royal London Asset Management (RLAM) has added a Global Sustainable Credit Fund, managed by Rachid Semaoune, to its sustainable investment range.

It will seek to exploit inefficiencies across global credit markets by creating a portfolio diversified by geography, currency, sector and issuer.

RLAM said the fund launches with £125m in assets under management and seeks total return over the medium term with a typical horizon of three to five years. The fund’s investment objective is to outperform the Bloomberg Barclays Global Aggregate Corporate Total Return Index Hedged USD by 0.75% per annum over rolling three year periods, gross of fees.

Portfolio manager Semaoune commented: “We see significant opportunities to help asset owners meet their long-term goals by gaining access to the full, diverse opportunity set within global credit markets via a robust approach that puts sustainability right at the heart of portfolio construction.”

First Sentier brings responsible infrastructure fund to UK range

11 February 2021

Australian asset manager First Sentier Investors is launching a UK-domiciled Responsible Listed Infrastructure Fund.

Managed by Rebecca Myatt in Sydney, the fund will invest in a diversified portfolio of global listed infrastructure stocks that are actively contributing to sustainable development within a framework of good corporate governance.

It will also seek to invest in companies that can contribute towards or benefit from the UN Sustainable Development Goals (SDGs), such as those delivering affordable clean energy to the communities they serve.

Myatt said: “It is our view that infrastructure companies are leading a global shift to cleaner energy, next-generation transport networks and increasing mobile connectivity. Infrastructure assets are large scale, long life, tangible assets that have significant environmental footprints and social licenses to operate.”

LGIM brings hydrogen ETF to European market

10 February 2021

Legal & General Investment Management (LGIM) has added another thematic ETF to its range with the launch of the L&G Hydrogen Economy UCITS ETF.

The group  said this will track the benchmark of the Solactive Hydrogen Economy Index NTR to offer investors exposure to the long-term investment opportunity offered by the transition to a low-carbon, hydrogen economy, such as technologies and firms that are enabling the production of cheaper, clean forms of hydrogen, as well as those that are expected to play an integral role in the hydrogen economy.

See also: – UK must balance old and new energy to reach COP26 goals

Companies will have a minimum market cap of $200m and can include electrolyser manufacturers, hydrogen producers, fuel-cell manufacturers, specialist mobility providers, fuel-cell component suppliers, key industrial and utility companies, and others in the supply chain.

Howie Li, head of ETFs at LGIM said: “Access to clean hydrogen will be key to lowering emissions in harder to abate industries where electrification alone is not enough. The commitments being made to the hydrogen economy by governments and businesses around the world are creating long-term investment opportunities with short-term catalysts.

“This fund offers investors early access to this fast evolving industry and allows investors the ability to control the amount of hydrogen exposure into their portfolio alongside our clean energy and battery ETFs.  As a package, the hydrogen ETF will complement these other two funds to provide investors with the ability to capture growth to be found in clean energy generation and energy storage.”

The strategy, which LGIM said is the first of its kind in Europe,  is listed on the London Stock Exchange, Deutsche Boerse, Borsa Italiana, Six Swiss Exchange and the NYSE Euronext, and is available to UK and European intermediary and retail investors. It carries a TER of 0.49%.

It sits within LGIM’s existing suite of sustainable thematic ETFs, such as the L&G Clean Energy UCITS ETF and the L&G Battery Value-Chain UCITS ETF.

Amundi launches ESG Improvers range

10 February 2021

Amundi has unveiled two equity products as the starting blocks of its new Amundi Funds ESG Improvers Range, providing access to the “ESG champions of tomorrow”.

The suite will feature actively managed portfolios that aims to capture ESG-related growth potential at an early stage.

The first two funds are the European Equity ESG Improvers and Pioneer US Equity ESG Improvers, benchmarked against the MSCI Europe Index and the S&P 500 Index respectively.

Along with any future products added to the range, these will exclude companies that are not aligned with Amundi’s ESG framework, and select companies that are fundamentally attractive and showing real and material progress on ESG. The fund management team will also engage with company management throughout the investment process to understand and positively impact the company’s financial and ESG credentials as a whole, the group said, and build a portfolio of concentrated, high conviction holdings.

See also: – Rules of engagement: What constitutes best practice?

Vincent Mortier, deputy CIO at Amundi, commented on the launch: “ESG Improvers is a new concept that Amundi has developed which leverages our strength across various teams and locations. It offers investors an opportunity to be part of an actively managed portfolio of tomorrow’s ESG winners. This fundamental bottom up concept is designed to offer attractive risk adjusted returns and to encourage companies to improve the ESG credentials.”

Foster Denovo launches sustainable passive MPS

10 February 2021

Financial advisory firm Foster Denovo has added a passive range to its Sustainable Dynamic Portfolios offering a lower cost choice for UK investors.

The new range will consist of five portfolios constructed around different levels of risk, and will be invested in physically backed ETFs that exclude companies without clear ESG practice. The firm said each portfolio will be subject to rigorous ongoing investment and sustainability risk assessments, led by independent external experts including sustainable and impact investing fund research specialists, Worthstone, as well as Foster Denovo’s head of investment research, Declan McAndrew.

See also: – Are ESG ETFs part of the solution?

McAndrew said: “Within this new range, as within our Active SDPs, we have focused on combining internal and external expertise to build portfolios that will proactively adapt to this rapidly changing and exciting field.

“This new launch will allow us to cater to an even broader range of investors who are looking for investment portfolios that can manage risk, while also delivering aspirational outcomes that reflect their financial objectives.”

Roger Brosch, CEO at Foster Denovo, added: “Adding the passive options to our Sustainable Dynamic Portfolios range will provide a complementary low-cost choice for investors seeking asset growth, whilst managing the risks from ESG factors.”

Ossiam launches smart beta biodiversity ETF

10 February 2021

Smart-beta specialist Ossiam, an affiliate of Natixis Investment Managers, have launched Ossiam Food for Biodiversity UCITS ETF, on the Xetra exchange in Germany.

The group said if there is further demand for the product it will be launched on the London Stock Exchange.

See also: – Investors are marrying ESG with smart beta

Taking an active quantitative approach to tackling global biodiversity loss, the strategy aims to achieve a “substantial and quantifiable reduction in the biodiversity footprint of the food and agriculture sector”.

Using the Corporate Biodiversity Footprint developed by Iceberg Data Lab, it captures the most material impacts of food companies and their value chain on ecosystems, the firm said. Therefore, the portfolio’s make-up typically leads to a fund with a 99% reduction in negative biodiversity impact, which is equivalent to saving 218 km² of pristine habitat for $100m invested, compared to an investment in the benchmark investment universe.

“The Corporate Biodiversity Footprint allows investors to assess corporates through their primary social contribution, food production and distribution, and their environmental impact notably the change of land use and contribution to deforestation,” according to Matthieu Maurin, CEO and co-founder of Iceberg Data Lab.

Ossiam has also implemented a dedicated engagement policy for this ETF where the analysts will engage with selected companies in the portfolio to make sure they identify, plan and pursue outcomes aiming to:

  • Ensure the preservation and sustainable use of ecosystems
  • Mitigate the impact companies have on biodiversity and prevent the extinction of threatened species
  • Integrate climate change measures into policies, strategies, operations and products

This team will also using its shareholder votes on actions regarding climate.

Bruno Poulin, CEO of Ossiam, said: “To address the increasing destruction of our natural environment, all sectors of the economy must contribute in numerous ways before it is too late. The earth’s population is predicted to reach about 11 billion by the end of this century, but if current food production methods and diets are not drastically improved, there are likely to be calamitous environmental, social and political outcomes.

“Mobilising capital and engaging with companies in the broad food and agriculture sectors is one way of making a positive contribution to the immense environmental challenges facing humanity now.”

Astia launches $100m VC fund targeting senior women

8 February 2021

Silicon Valley-headquartered investment organisation Astia has launched a $100m early-stage venture capital fund targeting companies with women in founding or executive roles.

According to Astia, last year less than 9% of venture capital was invested into companies that included women anywhere in the founding or leadership team, less than 2% was invested into women CEOs. The Astia Fund will invest globally in high-growth companies that have at least one woman in an executive, equity-holding position.

“There is a great deal of talk about inclusion and women within venture capital, but VCs need to do what they do best – invest,” said Sharon Vosmek, CEO of Astia. 

“With this new fund, Astia systematically invests in under-invested, yet outperforming companies – where women are rightly in positions of power, equity and influence. Not just because it’s the right thing to do, but because it creates better companies and delivers stronger returns.” 

The fund is led by an investment from Mastercard, and also includes investment from: Priya Mathur, past president of the board of CalPERS; Jim O’Neill former chief economist and former chairman of Asset Management at Goldman Sachs; Farvatn Venture; Portola Creek Capital; Tides Foundation; and members of Toniic, a global network of impact investors.  

Ann Cairns, executive vice-chair of Mastercard, said: “I am proud Mastercard is the lead investor in Astia’s first venture fund. Too much of our world was designed without women in mind – and without women involved. Even today, inequality and exclusion still hold women back. That’s why Mastercard is forging ambitious partnerships and championing the people, businesses and innovations that are transforming the way our world works. When women and underrepresented groups are at the leadership table these teams outperform for customers, investors and companies.” 

GAM launches sustainable EM bond strategy

8 February 2021

GAM Investments has launched a sustainable local emerging market bond strategy, the first in a range of sustainable strategies planned for this year.

It will typically have active exposure to 15-25 emerging and frontier markets, centred upon approximately 10 very liquid core markets and 100-150 bonds and FX forwards.

Stephanie Maier, global head of sustainable and impact investment at GAM, said: “We are listening to the clear client demand for more strategies focused on sustainable investing and are delighted to be working in partnership with our clients to develop these. Later this year, we plan to launch additional ESG-focused products, further building on our award winning Swiss Sustainable Companies strategy, which has a track record of more than 20 years.”

The strategy’s investment approach combines a positive tilt towards sovereigns with higher ESG scores, as defined by its benchmark, the JP Morgan ESG GBI-EM GD Index, with the team’s proprietary investment process incorporating ESG factors for active allocation within the index tilts. The JP Morgan ESG GBI-EM GD Index leverages research from both Sustainalytics and RepRisk.

The emerging market debt team, led by investment director Paul McNamara, will assess developments in the ‘big three’ global economics (the US, Europe and China) to establish three-to-five top-down global themes, which determine country selection, along with specific return and risk driver preferences. Country analysis is then performed using the team’s proprietary ‘Crisis Cycle Filter’, which captures the interaction between core ESG factors and nine traditional macroeconomic variables considered to be highly reliable, early indicators of financial crises, such as falling FX reserves or rapidly rising inflation.

McNamara said: “We have taken ESG factors into account in our investment process for our local emerging bond strategy for a number of years, purely for their impact on risk-adjusted returns. However, as ESG factors become more efficiently priced in the sovereign debt market, we believe that now is the time for a strategy that targets both a specific ESG tilt and integrates ESG factors from a risk/return perspective.”

ASI and The Big Issue launch climate solution multi-asset fund

1 February 2021

Aberdeen Standard Investments (ASI) has launched the Multi-Asset Climate Solutions (MACS) Fund in partnership with The Big Issue Group .

MACS will invest in renewable energy, electric vehicles, smart working, energy efficient buildings and other green technologies. Companies whose products, such as these, help mitigate climate change are expected to grow as the world shifts towards net-zero carbon emissions.

The fund will be managed by lead fund manager, Craig Mackenzie, head of strategic asset allocation; Chris Paine, investment manager; and Fiona Ritchie, ESG investment manager, multi-asset solutions.

Mackenzie said: “We have searched the globe to find companies whose products drive the shift to a zero-carbon green economy. Our multi-asset approach diversifies risk across asset classes, allowing our customers to put their money to work financing the climate transition with less volatile investment returns.” 

In 2018 ASI was one of the fund managers to join The Big Issue to launch its investment platform The Big Exchange, on which the fund will be available after it has been assessed. ASI has committed to sharing 20% of the net revenue generated by the MACS fund to support The Big Issue’s social causes.

See also: – Top fund groups launch retail impact platform

Nigel Kershaw OBE, chair of The Big Issue Group, said: “The Big Issue’s mission is to build a world that works for everyone, for now and for future generations. This fund is a natural extension of our mission, given that the negative effects of climate change are likely to have a disproportionate impact on vulnerable people across the world. We are proud of our partnership with Aberdeen Standard Investments and are excited to bring such an innovative product to market.”

ASI has selected FTSE Russell as its climate solutions data provider. ASI will use FTSE Russell’s industry leading new Green Revenues 2.0 data model, which measures the green revenue exposure of portfolio companies to comply with the incoming EU Taxonomy. The regulation defines those economic activities that play a key role in the transition to the green economy.

Arne Staal, global head of research and product management and FTSE Russell, said: “We are delighted that ASI has selected our Green Revenues 2.0 data for the launch of its innovative new Multi-Asset Climate Solutions fund. ASI has been early to recognise that green revenues data used to quantify a fund’s alignment to the green economy will be essential in complying with the incoming EU Taxonomy disclosure requirements for sustainable investment products by the end of 2021.”

Paraguay forestry fund launches

28 January 2021

Real assets investor Astarte Capital Partners and Stockholm-based forestry development company SilviPar have launched a new investment platform dedicated to sustainable forestry, with an immediate focus on Paraguay.

The SA Impact Forestry Fund will acquire, develop and manage new and existing forest assets. It will focus on acquiring low productivity farmland and converting it into a sustainable, cost-efficient forestry portfolio. The fund is positioned to capitalise on strong macro-economic tailwinds, producing wood for the global fibre and pulp markets, and generating new credits for the carbon offset market.

It hopes to make a significant impact by helping to stimulate local economic activity, decrease the use of fossil-based products and the deforestation of natural rainforest, by providing more sustainable and bio-based alternatives.

Astarte is providing seed capital to the fund and will act as the investment adviser. SilviPar is providing the fund’s seed assets and will manage the portfolio, with responsibility for the forestry strategy and day-to-day operations.

Schroders unveils global sustainable fund duo

26 January 2020

Schroders has brought two sustainable equity products to the UK investment market; the Global Sustainable Growth Fund and the Global Energy Transition Fund.

With both funds previously available in Europe as Luxembourg vehicles, the group said it is adding the products to its UK suite to demonstrate its ongoing commitment to providing a sustainable fund range to its UK client base. It follows the launch of the Schroder BSC Social Impact Trust in December and the group fulfilling its intention of fully integrating ESG factors into its decision making across all its investments last year.

Schroder Global Sustainable Growth Fund

The Schroder Global Sustainable Growth Fund is run by Katherine Davidson and seeks to provide capital growth by investing globally in the shares of sustainably run companies. These are businesses that are managed for the long term and take into account the interests of all stakeholders, including wider society.

Speaking at a webinar to launch the products, Davidson said: “Corporates do not operate in a vacuum, they need to think about their wider stakeholder base including customers, employees, supply chains and shareholders.

“Only those that treat these all fairly and take a long-term approach will succeed.”

She explained in what the team has coined “corporate karma”, companies that, for example, treat staff well through their salaries, training, and health & safety will impact the company’s ability to attract and retain the best talent and avoid things like industrial action.

“Equally, as we have seen with some companies in the UK recently embroiled in controversy over how they have treated their employees, will not do as well.

“Companies that are run in a way that is stakeholder-centric are more likely to have better financial performance.”

She added the Covid-19 pandemic has shone a spotlight on how and why companies achieve success, and “the emergence of a new social contract between companies and society”.

“One of the few positives of the crisis is that it has enabled us to start engaging with companies who previously hadn’t seen the business case for sustainability” she said. “Capital markets have rewarded companies that have acted responsibly through the pandemic, as demonstrated by the broad-based outperformance of sustainable funds and indices.”

Global Energy Transition Fund

Meanwhile, the group has also introduced the Global Energy Transition Fund managed by head of commodities Mark Lacey. The vehicle will identify growing opportunities across the clean energy focused investment universe, spanning renewable power production and energy equipment, transmission and distribution, energy storage, smart grid technologies and electric vehicles.

Manager Lacey, who is also responsible for the Schroder ISF Global Energy Fund as lead manager and Global Gold and Commodity Fund as co-manager, commented: “As we look ahead into 2021, demand for clean energy looks set to rise as costs fall. Improvements in technology and economies of scale mean that renewable energy is now cost-competitive with fossil fuels, even without subsidies. And the desire of consumers for more emissions-friendly technologies – such as electric vehicles – is set to fuel the growth of clean power generation.”

Jersey Finance launches wildlife fund

21 January 2021

Jersey Finance has launched a fund with the objective of protecting wildlife and rewilding ecosystems around the world.

Jersey Fund for a Wilder World is designed to give financial services firms – initially administrators, law and accountancy firms – in Jersey the opportunity to contribute a portion of their fees earned from sustainable finance workflows to a pooled central pot.

Elliot Refson, head of funds, Jersey Finance, said: “I’m particularly pleased to be working with Durrell, which has such strong roots in Jersey but expertise and a reputation that extends right around the world, and to have already had such strong support from firms here in Jersey. This fund provides a fantastic opportunity for firms in Jersey to make a combined, clear and positive difference to natural environments around the world.”

Launched in conjunction with Durrell Wildlife Conservation Trust, the fund will contribute towards Durrell’s ‘Rewild our World’ strategy, which undertakes projects aimed at reviving, restoring and rewilding diverse habitats around the world.

Lesley Dickie, CEO at Durrell, said: “Through the Rewild our World initiative, we have set our sights on delivering significant change to the fortunes of threatened wildlife through a positive and bold vision for conservation. By bringing together our own knowledge and experience of global conservation with the international expertise of Jersey’s financial services industry, this fund can play an important role in realising our long-term goals.”

Tim Morgan, chair of the Jersey Funds Association, said: “Reflecting our ambitions to support and house cross-border ESG investment, our industry is overwhelmingly supportive of this fund, which has the potential to make a real difference around the world.”

T Rowe Price launches first UK responsible equity fund

18 January 2021

US asset manager T Rowe Price has launched its first dedicated UK investment strategy.

The T. Rowe Price Funds OEIC – Responsible UK Equity Fund excludes companies involved in an extreme ESG breach that are not taking steps to remediate the issue. It will typically hold 85% of its 40-60 positions in companies described as durable compounders, with the remainder of the portfolio exploring companies on a path to improving cash flow and returns.

The fund, managed by Mitchell Todd, also utilises the group’s Responsible Investing Indicator Model (RIIM), which helps to screen the investment universe for responsible investing risks and opportunities and can help manage overall portfolio exposure to responsible investments.

“The launch of T Rowe Price’s first dedicated UK strategy further demonstrates our ambitions in the UK. We are extremely pleased with the ongoing development of our OEIC range, alongside the continual strengthening of our client service capability across all investor segments,” John Yule, head of UK and Ireland at T Rowe Price, said.

“T Rowe Price is renowned for fundamental bottom-up research and investors in this strategy will also benefit from a responsible investment framework – which assists in the identification of corporates on the right side of change.”

Rathbones plans to launch sustainable multi-asset portfolios 

18 January 2021

Rathbones plans to launch a new rage of four risk-rated, risk-targeted, sustainable investment funds in the first half of this year.

The Rathbone Greenbank Multi-Asset Portfolios (RGMAPs) will invest directly around the globe using a combination of government bonds, supra-national bonds, corporate bonds, listed company shares, structured products and derivatives, and will sit in the IA Volatility Managed sector.

The funds will be managed by Rathbones’ multi-asset team, comprising David Coombs, head of multi-asset investments, and Will McIntosh-Whyte, who will be responsible for the day-to-day investment of the portfolios.

McIntosh-Whyte said: “These funds feel like a natural progression for us, given our in-house expertise. We are focused on providing very clear parameters around all the funds in order that clients can have confidence in choosing the most suitable option within our range and enabling them to invest in line with their sustainability objectives without foregoing financial disciplines”. 

The funds will be supported by Rathbone Greenbank Investments, Rathbones’ specialist ethical, sustainable and impact research and investment team, as well as Rathbones’ fixed income and equity analysts. Greenbank can veto investments that do not meet the funds’ responsible investment policy.

Mike Webb, chief executive, Rathbone Unit Trust Management, said: “Subject to regulatory approval, these new multi-asset funds will be able to map into advisers’ investment processes across most client risk appetites, and with the industry-leading ethical and sustainable oversight of Greenbank as an authentic, independent arbiter. We believe that this strong collaboration ensures the integrity that our clients have come to expect of us.” 

The new multi-asset range will complement Rathbones’ existing sustainable equity offering, the Rathbone Global Sustainability Fund, managed by David Harrison, which will offer advisers a higher risk solution invested 100% in equities. Its benchmark is the FTSE World Index. Subject to regulatory approval, the name of the Rathbone Global Sustainability Fund will be changed to the Rathbone Greenbank Global Sustainability Fund. There will be no change to the investment process or fund manager. The recommended holding period remains five years.  

The new range will employ the same negative and positive criteria as the Rathbone Global Sustainability Fund for its exposure across equities and corporate bonds*. 

The new range will offer investors the option of the following risk strategies: 

RMAP*  strategy  (*Rathbone Multi Asset Portfolios) RGMAP strategy   Target return / Vol. target (% of FTSE Developed Index) Risk level Recommended holding period 
RMAP Total Return  Rathbone Greenbank Total Return Portfolio Bank of England base rate + 2%   Vol. target <33% Lower 3 years  
RMAP Defensive Growth Rathbone Greenbank Defensive Growth Portfolio CPI + 2%  Vol. target <50% Lower-to- medium 5 years  
RMAP Strategic Growth Rathbone Greenbank Strategic Growth Portfolio  CPI + 3  Vol. target <66% Medium 5 years  
RMAP Dynamic Growth Rathbone Greenbank Dynamic Growth Portfolio CPI + 4  Vol. target <83%  Medium-to-higher 5 years  

The charges on the new funds are expected to be as follows:  

Fund name Share classes Unit types Currency Launch price AMC Estimated OCF (UCIT) 
Rathbone Greenbank Total Return Portfolio S-class Income and Accumulation GBP  £1.00  0.50% 0.67% 
Rathbone Greenbank Defensive Growth Portfolio S-class Income and Accumulation GBP £1.00  0.50% 0.71% 
Rathbone Greenbank Strategic Growth Portfolio S-class Income and Accumulation GBP £1.00 0.50% 0.65% 
Rathbone Greenbank Dynamic Growth Portfolio S-class Income and Accumulation GBP £1.00  0.50% 0.75% 

The minimum holding across all funds is £1000, with subsequent investments of a minimum of £500.  

To support the launch, Rathbones expects to hire an assistant into the team, an investment specialist, as well as additional analysts to support the research, ideas generation, and client communications associated with the funds.   

Two Mirabaud strategies receive SRI label

14 January 2021

Mirabaud Asset Management has received the SRI label for its two global equity strategies: the Mirabaud – Sustainable Global Focus Fund and the Mirabaud – Sustainable Global High Dividend Fund.

The SRI label was created and is supported by the French Ministry of Finance. It follows a set of rigorous criteria to demonstrate the systematic and measurable integration of extra-financial and ESG analysis in investments. These two funds join the Mirabaud – Sustainable Global Convertible Bond Fund in having been awarded this SRI label.

Hamid Amoura, head of responsible investment at Mirabaud Asset Management, said: “Obtaining this label reflects our continuous commitment to responsible investment and our ambition to strengthen Mirabaud Asset Management’s positioning in terms of sustainability and responsibility.”

Anu Narula, head of global equities at Mirabaud Asset Management said: “It’s great to receive this label in recognition of our robust ESG processes in our global equity franchise. As active, engaged managers, we believe there is no substitute for in-depth, bottom-up company research and ongoing active engagement with companies. This deep due diligence is essential to gaining insights into a company’s management quality, business strategy and potential risk exposure.”

Invesco launches Japan and Pacific ESG ETFs

11 January 2021

Invesco has expanded its ESG ETF range with two new funds investing in Japan and Pacific ex Japan.

The Invesco MSCI Japan ESG Universal Screened UCITS ETF and Invesco MSCI Pacific ex Japan ESG Universal Screened UCITS ETF will track the performance of the customised versions of the MSCI ESG Universal indices. These are constructed from the parent MSCI indices by excluding any stock that is involved in controversial, conventional or nuclear weapons, civilian firearms, oil sands, thermal coal, tobacco or recreational cannabis. Any company that has faced severe controversies over ESG issues in the past three years or has a very low MSCI ESG score is also removed from the index. The remaining stocks are reweighted by the product of their ESG scores, ESG trend scores and market capitalisation. 

Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, said: “With 60% of all equity ETF flows last year going into funds with an ESG objective, demand is clearly strong. We believe ESG will be embedded even more broadly into portfolios with investors no longer needing to sacrifice their investment objectives to follow their principles.

“Our suite of MSCI ESG Universal ETFs offers investors low-cost tools to construct diversified equity portfolios. We will continue building out our ESG offering in response to market opportunities and driven by investor demand.”

Listed on the London Stock Exchange, the ETFs carry an ongoing charge of 0.19% per annum and are trading n US dollars.

Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, added: “Different investors will often vary in their objectives, and this is most evident in the ESG space. Generally speaking, the more you exclude from an index, the more likely the performance will deviate from the base index. While that is acceptable for some investors, it’s not for others. Many want to reduce their portfolio’s carbon footprint and improve other ESG characteristics but at the same time maintain their overall risk and expected returns. We designed these ETFs to provide investors with materially significant ESG improvements for their core equity exposure.”

EIS fund launched to back early-stage environmental firms

11 January 2021

Venture capital firm OnePlanetCapital has launched a specialist sustainability EIS fund investing in companies that have a positive environmental impact.

It will focus on three interrelated areas; climate change, the environment and consumer sustainability, all underpinned by an ESG framework looking at environmental impact, social purpose and corporate governance in its investee companies.

For climate change, the OnePlanetCapital Sustainable EIS Fund will focus on companies taking steps to tackle emissions, i.e. through renewable energy, energy efficiency & transport. Secondly, it will raise capital for “companies of the future” with a positive environmental impact including agricultural technology, pollution management or biodiversity, and lastly, for consumer sustainability, it will invest in food companies that reduce climate change and environmental impact, for example or fashion companies that reduce C02 emissions and pollution, or businesses in the recycling space.

Matthew Jellicoe, co-founder of OnePlanetCapital, commented: “In 2019, the UK became the first major economy to pass laws to end its contribution to global warming by 2050. This target requires a paradigm shift in the UK economy and enormous amounts of investment into the businesses of the future. 

 “Unprecedented change is required to our global economy. We are on the verge of a green industrial revolution and the world is waking up to the substantial changes needed to tackle the climate issues we face. This has been amplified by numerous lockdowns over the last 11 months which have underlined the fragility of the world as we know it. Decarbonisation is now being backed by all major developed economies including the US and China and huge amounts are being invested in green energy, green technology and services. Consumers are also becoming increasingly driven by sustainability and becoming more aware of a business’ green and social purpose credentials. 

“We only have one planet and now it’s time to get involved and make a difference for our collective future’’. 

 “We founded OnePlanetCapital to be more than an investment house. We’re part of a growing, global movement, and are focused on unlocking the positive impact of early-stage companies as they grow. As a team we’re spearheading the green industrial revolution and disrupting the status quo to create a positive global impact.”

Morgan Stanley launches UK sustainable fixed income fund

14 December 2020

Morgan Stanley Investment Management (MSIM) has launched a UK sustainable fixed income fund.

The UK Sustainable Fixed Income Opportunities Fund aims to:

  • Reduce exposure to material ESG risk and negative sustainability impacts, through restriction screening of controversial sectors such as weapons, tobacco, and some fossil fuels, as well as international norms violations.
  • Tilt the portfolio in favour of the 80% strongest sustainability performers across sovereigns and corporates, by sub-sector, as defined by MSIM fixed income’s proprietary ESG assessment methodologies.
  • Contribute to positive outcomes based on key sustainability themes, with a particular focus on low carbon footprint.

The fund is designed to be less carbon intensive than its index and will maintain a net positive alignment with the UN SDGs, while also investing in green, social and other labelled sustainable bonds.

The fund’s manager Leon Grenyer said: “Our flexible approach to portfolio positioning allows us to adjust market exposure in line with the macroeconomic backdrop, as we seek to generate returns from a broad range of investment opportunities. We utilise an active asset allocation process across the global fixed income opportunity set, and, as we are not tied to a benchmark, our investment decisions are not restricted by geographic and sector weightings.

A benchmark-orientated approach to investing in fixed income can be sub-optimal as asset allocation driven by benchmark weightings can result in exposure to parts of the market which offer lower potential returns or greater risk. As such, an active and flexible investment strategy may be a better alternative and stand to outperform.”

Richard Lockwood, head of distribution for Northern Europe, said: “UK Sustainable Fixed Income Opportunities further adds to our fund range offering client’s products that focus on key social issues, climate change and other ESG themes in the investment process while aiming to deliver attractive, long-term returns.

“UK investors are well aware of the challenges faced across all areas of the sustainability spectrum and our fixed income sustainability range offers them an opportunity to align their ESG requirements to their investment goals.”

ASI unveils sustainable EM equity fund

14 December 2020

Aberdeen Standard Investments (ASI) has launched an Emerging Markets Sustainable Development Equity Fund that will invest in emerging market economies with strong growth potential and where capital will have the greatest impact.

The portfolio will contain 30-60 high-conviction stocks, which the team will select based on emerging market companies strongly aligned with the UN SDGs

In a statement the firm said: “Through active engagements, the investment team will seek to drive positive changes in corporate behaviour, increase the SDG alignment of ASI’s holdings, and encourage better disclosure of SDG alignment by companies.”

Fiona Manning, investment director at ASI, said: “The UN’s Sustainable Development Goals provide an excellent framework to ensure that efforts are directed to the areas of greatest need. While some progress has been made towards achieving these goals by 2030, people in many emerging market countries are still not benefiting from growth and progress and are increasingly vulnerable to economic, social and environmental risks.”

JP Morgan launches first sustainable OEIC

14 December 2020

In response to client demand, JP Morgan Asset Management has launched its first sustainable OEIC and the first sustainable UK-domiciled active fund in the Investment Association’s Global Emerging Markets sector.

The strategy, which is run by portfolio managers Amit Mehta and John Citron, will exclude unsustainable sectors (including weapons, tobacco and gambling) and apply proprietary exclusions based on internal research, in order to identify which companies are considered ESG leaders and can demonstrate the economic sustainability of their business models.

It follows the launch of JPMorgan Funds – Emerging Markets Equity Sustainable Fund in November 2019.

Dale Erdei, head of UK funds at JP Morgan Asset Management, said: “For those clients wanting to step beyond ESG integration in emerging markets, our actively managed OEIC strategy – which seeks to invest in sustainable leaders across emerging markets – offers a well-supported and well-resourced step in that direction.”

Resonance and Patron Capital launch first gender-lens homelessness property fund

14 December 2020

Impact investor Resonance and property investor Patron Capital have launched a £100m women’s homelessness property fund.

Thought to be the first gender-lens property fund, the Women In Safe Homes fund will buy 650 affordable homes to lease to women’s sector organisations and homelessness charities.

The fund is launching with an initial investment of £15.5m from Big Society Capital, the MacArthur Foundation, Patron’s managing director Keith Breslauer and US-based Lostand Foundation.

Kay Orlopp, Resonance’s property fund development manager and lead on the Women in Safe Homes fund, said: “Thousands of women in the UK are at risk of, or experiencing, homelessness due to a chronic lack of suitable and affordable housing. This is particularly prevalent for women who have experienced domestic abuse and are unable to live their lives in safety or who are leaving prison with nowhere to go.

“We are delighted the fund is launching with a £15.5 million investment from its founder investors – this will enable us to attract like-minded investors into the fund and help make a real difference to the lives of many women.”

Breslauer said: “The case for impact investing has never been more relevant than it is right now, with the pandemic both exacerbating and shining a light on the societal issues that vehicles such as the Women in Safe Homes fund can look to address.

“Societal impact and the potential to change the world around us have always underpinned our work at Patron Capital and are key to my own personal philosophy on life. This is why I have personally invested in the fund and we are looking forward to taking this a step further by working alongside Resonance to co-manage the fund.”

The fund has been developed over two years in collaboration with leading women’s organisations including Women’s Aid. Karen Ng, investment director at Big Society Capital, said: “Two years ago we spoke to 60 women’s sector organisations to better understand the needs of women at risk of homelessness. During this process, we heard too many stories about the unmet and often hidden housing needs of women – and from there we made a commitment to providing safe and affordable homes to enable these women to live better lives. We are pleased to bring this vision to life, in partnership with Resonance and Patron, and our fellow pioneering investors.”

Women’s experiences of homelessness often differ from men’s. The fund will support women who are experiencing homelessness, have been involved with the criminal justice system, are survivors of domestic abuse or have other complex needs.

Initial charity partners Preston Road Women’s Centre and Refuge will provide specialist and housing support to help women recover from abusive or difficult circumstances and Nacro will house women under its bail, accommodation and support service, enabling women to find stability and rebuild their lives, and help them to sustain their tenancies.

Lisa Hilder, trustee and treasurer of Preston Road Women’s Centre said: “National statistics tell us that on average, women will leave and return to a violent relationship seven times before making a permanent break from the perpetrator, often because they are unable to access suitable housing and support.

“When we provide safe housing and wrap around support, the women we work with make that permanent break from the perpetrator first time round. The fund and its social impact investment will enable more women and children to be safe and to live their lives free from violence and abuse.”

Nahar Choudhury, head bail accommodation and support service at Nacro said: “Too often women leave prison ready to turn their lives around but without the resources and support to be able to do it we are settling them up to fail. Having a safe, secure place to live is the base line of being able to change their lives for the better, enabling them to get a job, rebuild family ties and escape unhealthy relationships. This fund will give us the opportunity to support more women coming out of prison, reduce the risk of reoffending and give them the best chance at a second chance.”

The fund is open to institutional, pension fund and professional investors in the UK and internationally.

Robeco unveils climate bond duo

9 December 2020

Robeco has added two fixed income products to its range focused on tackling climate change.

The RobecoSAM Climate Global Credits strategy is managed by Victor Verberk, Reinout Schapers and Peter Kwaak from Robeco’s global credit team and invests globally in corporate bonds with explicit climate targets that contribute to the goals of the Paris Agreement. The strategy starts with a 50% lower carbon footprint than the broader corporate bond market, and aims to decarbonise 7% per year while outperforming its Paris-aligned benchmark.

Meanwhile, the RobecoSAM Climate Global Bonds fund invests in a global aggregate portfolio of fixed income assets. Managed by Jamie Stuttard, Regina Borromeo and Bob Stoutjesdijk from Robeco’s global fixed income macro team, the strategy aims for a lower carbon footprint relative to the global investment grade bond universe and an average of at least 7% decarbonisation per annum, while also outperforming its Paris-aware benchmark.

Victor Verberk, CIO fixed income and sustainability at Robeco, commented: “As global leader in sustainable investing we are very committed to the Paris Agreement. In fact, we recently announced our ambition to achieve net-zero greenhouse gas emissions by 2050 across all of our assets under management.

“Launching these strategies and making them available to our clients is a clear example of our strong conviction that investing is not only about creating wealth but also about contributing to wellbeing. It provides investors with the opportunity to be at the forefront of the transition to a low-carbon economy. These strategies bring to life our commitment to the Paris Agreement, combine our leading global position in sustainable investing with our long history and expertise in fixed income, and are a further step in our efforts to combat climate change and lower the carbon footprint of our investments.”

The funds will be measured against newly created climate indexes developed by Robeco in collaboration with Solactive. The group also said climate change considerations are fully integrated into the investment process and portfolio construction, and engagement carried out by Robeco’s active ownership team is also part of the strategy. 

Both strategies are domiciled in Luxembourg and will be available to institutional, and retail investors via wholesale distributors.

Amundi responds to social bond growth with new strategy

8 December 2020

European asset manager Amundi has launched a social bond strategy following a surge in issuance in the space.

Social bonds have become the most prominent of sustainable bonds in 2020, echoing the fast-rising growth of green bonds in recent years, as Covid-19 issuance seeking to support healthcare, employment and housing amid the pandemic crisis.

Amundi said social bond issuances have tripled in 2020 compared to last year as a result of new bonds targeting pandemic-related issues and issuers embracing the social bond format to access credit.

See also: – Social bond issuance to hit $100bn this year

For example, on 20 October the EU issued €17bn in social bonds to help finance member states’ programmes on employment support in the midst of the ongoing Covid-19 pandemic. The asset manager predicted this is the beginning of the market’s trajectory and issuance could catch up with that of green bonds – another area that saw record levels of issuance this year.

Amundi’s Social Bond Strategy will be run by the firm’s alpha fixed income team, which already run the global and euro fixed income strategies. Lead portfolio manager will be Isabelle Vic-Philippe, head of euro aggregate, while Alban de Faÿ, head of fixed income socially responsible investing process, and Dany da Fonseca, fixed income euro investment grade credit, will be co-portfolio managers.

It will mostly invest in social bonds aligned with the International Capital Markets Association’s Social Bond Principles (SBP) whose proceeds will be used for projects compliant with the SBP Project Categories. Additionally, the team will look to expand the investment universe by including regular bonds issued by sovereigns and corporates that have been screened for strong social practices, and the portfolio may also include innovative instruments such as sustainability-linked bonds with social targets, the group said.

Eric Brard, head of fixed income at Amundi, commented on the launch: “In the context of the current economic and health crisis, investors are increasingly looking for innovative solutions that can generate positive outcomes for society as a whole. As the fastest-growing segment of the sustainable fixed income market in 2020, social bonds are emerging as an appropriate financial instrument seeking to capture opportunities of financing projects with a social agenda without giving up on returns.”

Resonance launches national homelessness property fund

7 December 2020

Social impact investor Resonance has launched a new homelessness property fund with a target size of £50-£100m.

National Homelessness Property fund 2 will first buy affordable homes in Greater Manchester, and has partnered with Greater Manchester housing provider group Let Us in order to do so.

Last year 97,000 households in Greater Manchester were waiting for a social home, Resonance said, with more than 26,000 of these in priority need for a social rented home.

“With homelessness on the rise the need for safe, decent and affordable housing is great; in Greater Manchester alone over 80,000 people are on social housing waiting lists,” said Simon Chisolm, CIO at Resonance.

“Building on the success of our previous property funds Resonance is proud to launch our next social impact property fund, the National Homelessness Property fund 2, which will initially focus on purchasing affordable homes across the North West.”

The fund, which follows Resonance’s homelessness property fund launched in December 2015, works by acquiring properties and leasing them to the housing sector and homelessness charities to provide individuals and families at risk of homelessness with a settled home.

Greater Manchester Pension Fund, Greater Manchester Combined Authority and Big Society Capital are the first investors in the fund, with a combined initial investment of £20m. The fund will target £100m by aiming to attract institutional, pension funds, foundations and professional investors.

Brenda Warrington, chair of the Greater Manchester Pension Fund, said: “I am proud the Greater Manchester Pension Fund is able to invest in the Resonance Homelessness Property fund 2.

“It’s important to me that we are able to make a sound and socially impactful investment, which will help provide much needed, affordable and refurbished accommodation for rent across Greater Manchester, while still generating a return for the pension fund, to enable it to meet the pension promises of our members, who mainly live and work in Greater Manchester.”

Fidelity completes sustainable ETF range

7 December 2020

Fidelity International has launched two new sustainable funds, completing its Sustainable Research Enhanced ETF range.

Fidelity Sustainable Research Enhanced Japan UCITS ETF contains 150-200 stocks and Fidelity Sustainable Research Enhanced Pacific Ex Japan UCITS ETF 100-150 stocks. Both will be rebalanced quarterly.

Nick King, head of ETFs at Fidelity International, said: “The cornerstone of Fidelity’s investment approach is bottom-up research. The Sustainable Research Enhanced ETF range leverages our fundamental and ESG research to provide efficient and cost-effective building blocks.

“I am delighted to further expand this range to offer our clients a full set of core regional exposures with sustainable characteristics.”

Nordea unveils Global Social Empowerment Strategy

4 December 2020

Nordea Asset Management has added a Global Social Empowerment fund to its ESG range.

The fund will invest in companies tackling key social issues such as healthcare, education, and affordable housing, after the pandemic highlighted the “urgent need” to fund these areas, said Nordea in a statement. It added the strategy focuses on businesses that provide solutions that address social issues, create a positive impact and generate “sustainable shareholder value”.  

Thomas Sørensen, co-manager of Nordea’s Global Social Empowerment Strategy, said: “There is a fundamental need to address the social issues facing society today. Companies that offer solutions to these problems represent a compelling proposition for investors. We believe social empowerment— which is the main thrust of our strategy — is the next theme investors will turn their attention to as they seek to have a positive impact whilst achieving attractive returns.” 

The fund will sit alongside the group’s €4.2bn Global Climate and Environment Strategy, which is also co-managed by Sørensen.

The Global Social Empowerment Strategy will invest in three thematic areas, co-manager Olutayo Osunkunle explained: “Vital needs, Inclusion and Empowerment. By allocating capital for positive social solutions we aim to support sustainable global growth while contributing to the goals set out in the United Nations’ Sustainable Development Goals for 2030.”

Fintech launches world-first carbon avoidance UCITS ETF

01 December 2020

Impact fintech iClima Earth is launching an ESG Ucits ETF that aims to provide exposure to companies offering products and services that enable CO2e avoidance solutions.

The iClima Global Decarbonisation Enablers UCITS ETF will list on the London Stock Exchange in early December and track the iClima Global Decarbonisation Enablers Index.

Gabriela Herculano, CEO of iClima Earth said “iClima Earth estimates the 151 companies in the iClima Global Decarbonisation Enablers Index can potentially avoid over 0.6 gigatonnes of C02e in 2021 – the planet needs to avoid 4.26 gigatonnes of new emissions in 2021 to reach the goal of limiting global warming to 1.5 degrees celsius.”

The fund will provide exposure to new technologies and companies that reduce and avoid carbon emissions across five subsectors: green energy, green transportation, water and waste improvements, decarbonisation enabling solutions and sustainable products.

“There are many ‘green’ investment products already on the market that use complex ESG scores or focus on low-carbon companies doing less harm,” Herculano said. “However, the best way to reduce CO2e in the atmosphere is to find lower-emission alternatives to products and services, thereby ‘avoiding’ emission.”

The ETF has a TER of 0.65% and is thought to be the first carbon avoidance Ucits ETF.

Aviva’s multi-asset range to use ESG

01 December 2020

Aviva Investors’ new multi-asset fund range will invest using ESG principles.

The five risk-targeted multi-asset funds in the Multi Asset Fund (MAF) core range use passive ESG-optimised strategies, which utilise Aviva Investors’ proprietary ESG scoring system, while MAF Plus has access to active ESG-integrated funds and thematic impact funds that look to address climate change. Both fund ranges benefit from active ownership – voting and engagement.

Sunil Krishnan, head of multi asset funds at Aviva Investors, said: “Investors today are clearer than ever that they want to invest with ESG principles in mind, but it has not always been possible to invest sustainably while keeping costs down.

“We set ourselves the challenge of creating a multi-asset proposition that allows investors to do both and we believe that the new MAF Core range achieves just that.”

The range will be managed by multi-asset portfolio managers Guillaume Paillat and Sotirios Nakos, who report to Krishnan. Its OCF is 0.15%.

Fidelity launches sustainable emerging market ETF

27 November 2020

Fidelity International has launched a new sustainable emerging market ETF, adding to its Sustainable Research Enhanced Equity ETF range launched in June.

The Fidelity Sustainable Research Enhanced Emerging Market Equity ETF uses a systematic active strategy and Fidelity’s proprietary analyst research. It contains 300-350 stocks chosen for their positive fundamental outlook and sustainability credentials.

Nick King, head of ETFs at Fidelity International, said:Our new Sustainable Research Enhanced ETF range offers investors a cost-effective and differentiated product aligned to their growing ESG requirements. I am pleased we can now offer clients an emerging market building block to implement their regional views. We hope to expand range further in the coming months.”

The fund has an OCF of 0.5% and forms part of Fidelity’s Sustainable Family range.

Amundi teams up with Oxbridge for low-carbon index fund

23 November 2020

Amundi has partnered with the University of Oxford and the University of Cambridge to launch a low-carbon index fund for charities and endowments.

The European asset manager is working with Clare College, Cambridge, and Corpus Christi College, Oxford, on the Amundi ESG Global Low Carbon Fund. Clare College is seeing the fund by transferring all of its endowment fund’s equity allocation to the strategy as part of their plans to achieve zero carbon and reduce the long-term risk of stranded assets. 

The index tracker, which will replicate the performance of the MSCI ACWI Index has been designed to address the financial risk of climate change through these ESG-focused objectives:

  1. Remove all fossil fuel reserves; energy sector stocks; and thermal coal within the portfolio
  2. Look to significantly improve green revenues and reduce carbon emission intensity
  3. Reduce the risk of exposure to controversies

Investment teams from Amundi, Oxford and Cambridge will collaborate on the management of the fund.

Paul Warren, bursar of Clare College, Cambridge, said: “Transitioning our equity allocation to this solution will play an important role in delivering this objective by reducing our climate-risk exposure. Amundi was carefully selected based on its flexibility, experience managing climate solutions and indexing expertise.”

Ashley Fagan, head of ETF, indexing & smart beta strategy & business development for UK & Ireland at Amundi, added: “The strategy we have developed together offers UK endowments, charities and professional investors a simple and cost-effective approach to reduce climate exposure in their portfolios over the long-term.”

Fidelity adds to sustainable range to meet client demand

17 November 2020

Fidelity International will add three new Luxembourg-domiciled funds to its sustainable range.

The Sustainable Asia Equity Fund, Sustainable European Smaller Companies Fund and the Sustainable Japan Equity Fund sit in Fidelity’s Sustainable Family of Funds, which currently comprises eight funds.

All these funds must have, as a minimum, at least 70% of their holdings in MSCI-rated ESG scores of at least BBB or, if there is no MSCI rating, FIL ESG scores of at least C, and the remaining 30% must have improving ESG trajectories.

The Sustainable Family’s investment approach centres around engagement, exclusion, and Fidelity’s proprietary research. This combines Fidelity’s focus on active engagement with an enhanced exclusion framework.

Jenn-Hui Tan, global head of stewardship and sustainable investing, said:“We have responded to our clients’ demands in recent years by substantially developing our in-house resources to scrutinise and map sustainability risks, including the introduction of our proprietary sustainability ratings, which form the cornerstone of our ESG analysis.

“Our Sustainable Family has grown from five to eleven funds in just over a year, and I fully expect this trend to continue in line with rising regulatory focus and increasing client demand.” 

M&G launches climate solutions equity fund

16 November 2020

M&G Investments has launched an equity fund that invests in companies providing solutions to climate change.

The M&G Climate Solutions Fund, managed by Randeep Somel, looks for companies having a transformational effect on society or the environment, ones that provide tools for others to have positive impacts, or companies that are championing sustainability in their sector.

It is a concentrated portfolio of around 30 companies diversified around three main impact areas: clean energy, green technology and the promotion of the circular economy.

M&G will annually report each company’s net positive climate impact and revenue alignment with climate-related UN Sustainable Development Goals.

Somel said: “The green agenda and the need to provide solutions to the challenge of climate change has unlocked the creativity and ingenuity of many companies who have these solutions at the heart of what they do. This is a multi-decade opportunity for companies who deliver innovative products and services – and for those who invest in them.”

The fund follows the same investment approach and process as M&G’s £306m Positive Impact strategy, which launched in November

Ben Constable-Maxwell, head of sustainable and impact investing, said: “As the world focuses on the scale of the sustainability challenges faced by our planet, positive impact finance has an opportunity to put financial firepower behind pioneering businesses providing solutions to those challenges.”

Lombard Odier launches Prince Charles-inspired equity fund

16 November 2020

Lombard Odier has launched a global equity fund that aims to support the move towards a circular economy.

The Natural Capital strategy is a high-conviction portfolio of 40-50 small to mid-sized profitable companies in North America, Europe and Asia. It looks for opportunities in the circular bio-economy, resource efficiency, outcome-orientated consumption and zero waste. 

It has been developed in partnership with the Circular Bioeconomy Alliance, a group established under the Sustainable Markets Initiative set up by the Prince of Wales, who said: “We need to accelerate our efforts and set the course for a sustainable future rooted in a new economic model – in other words, a circular bioeconomy that puts nature and the restoration of natural capital at the centre of the entire process. 

“I am enormously encouraged to see that, under my Sustainable Markets Initiative, the Circular Bioeconomy Alliance is working hand-in-hand to support the Natural Capital strategy.”

The Natural Capital strategy complements Lombard Odier’s Climate Transition strategy, which launched earlier this year.  

Aberdeen Standard launches sustainable index funds

12 November 2020

Aberdeen Standard Investments (ASI) has launched a range of sustainable index funds aimed at pension funds and other institutional investors that excludes companies with ‘significant sustainability risks’.

Those are companies engaged in UN Global Impact fails, controversial weapons, tobacco, thermal goal and unconventional oil and gas. The funds achieve this by tracking seven customised MSCI sustainable equity indices.

The three funds in the range are the ASI Sustainable Index World Equity Fund, the ASI Sustainable Index UK Equity Fund and the ASI Sustainable Index Emerging Markets Equity Fund, which will launch at the start of next year.

The ASI Sustainable Index funds are authorised in the UK within an authorised contractual scheme.

David Wickham, head of quantitative investment solutions – the team managing the funds – at ASI, said this added benefit of tax transparency may make them suitable core investments.

At the portfolio level the funds also aim to enhance ESG scores by 10-20%, improve green revenues by 50% and reduce carbon intensity by 50%.

Caroline Silander, head of equity indexation at ASI, said: “While there are a growing number of sustainable equity indices to choose from, we felt there was a gap in the market as many index designs tend to be highly specific in their purpose. However, these approaches often induce greater tracking error and greater index/portfolio turnover than we believe is justifiable for those seeking a broad market-capitalisation weighted indexing approach.”

Allianz adds three SDG-aligned equity funds to thematic range

12 November 2020

Allianz Global Investors (AllianzGI) has launched three new equity strategies aligned with the UN Sustainable Development Goals (SDGs).

The investment manager said the Allianz Positive Change, Allianz Clean Planet and Allianz Food Security funds ‘take an active approach to ESG integration, including a detailed assessment of the most significant risk factors, and exclusion criteria, all to safeguard against harmful activities and corporate controversies’.

The funds will consider eight themes: social inclusion, health, financial inclusion, education, food security, water, clean land/circular economy and energy transition. They will then identify specific outcomes targeted by one or more of the SDGs to select companies that are contributing to solutions to these targets.

For example, this allows investment in education technology or sustainable agriculture.

“Businesses in these areas show a certain resilience against macroeconomic and political volatility,” said Andreas Fruschki, head of thematic investing at AllianzGI.

“While each company that we consider eligible for an SDG strategy has a clear role to play in achieving the relevant SDG, the exact extent of its contribution to the UN goal can be difficult to quantify. That makes a thorough, qualitative research process essential. Given the global focus on the UN goals, companies that directly support them are likely to benefit from increased interest and growth. This may represent a strong investment case generating sustainable returns.”

These three funds adds to AllianzGI’s thematic range, which includes the newly launched Allianz Global Water strategy and Allianz Smart Energy fund.

JPMAM launches ETF to reduce carbon emissions

11 November 2020

JP Morgan Asset Management (JPMAM) has launched a sustainable ETF that aims to achieve a ‘meaningful reduction in carbon intensity without relying on exclusions or sector deviations’.

The JPMorgan Carbon Transition Global Equity UCITS ETF will track the JPMorgan Asset Management Carbon Transition Global Equity Index and offer core exposure to global equities.

See also: – Green Dream with JPMAM’s Wu: ESG is not good or bad, it’s neutral

Compared with the MSCI World Index, the fund intends to offer 30% less carbon intensity and a year-on-year decarbonisation target of at least 7%, which is in line with the EU Climate Transition Benchmark.

The fund uses a framework created by JPMAM’s Sustainable Investing and Quantitative Beta Solutions (QBS) teams. This helps to mitigate the risks of climate change by reducing carbon emissions, and finding the opportunities and technologies required for a successful transition to a low carbon world.

Using data from the companies themselves, as well as data sourced from JPMAM’s own tool Themebot, the framework evaluates the production of direct and indirect emissions and how companies plan to manage and reduce emissions; how companies manage resources; and other climate-related risk management considerations, such as physical and reputational risks.

Jennifer Wu, global head of sustainable investing at JPMAM, said: “Investing in carbon transition aware strategies needs to start now. Differences are emerging, between the potential winners and losers in the low carbon transition, and by acting early, before climate risks and opportunities are fully priced in, investors can capture potentially significant returns as prices continue to adjust. We’ve had interest from a range of clients looking to leverage our framework to help meet their specific sustainable investment goals.”

The fund is Irish domiciled and now listed on the London Stock Exchange, Borsa Italiana and Deutsche Börse Xetra. It will be managed by QBS chief investment officer Yazann Romahi and portfolio manager Aijaz Hussain, and will have a total expense ratio of 19 basis points.

BlackRock launches fossil fuel-screened fund

10 November 2020

BlackRock has launched a new equity index fund to help Oxford University divest its endowment from fossil fuels.

The iShares Developed World Fossil Fuel Screened Equity Index Fund will screen out of companies directly involved in fossil fuel extraction, production and exploration as well as those owning fossil fuel reserves. 

In order to do this, BlackRock has worked the MSCI to design a custom MSCI World Select Fossil Fuel Screened Index to screen and exclude fossil fuels. Screens have also been added to avoid exposure to certain companies or sectors associated with controversial nuclear and civilian weapons, tobacco, thermal coal, tar sands and companies that are not compliant with the United Nations Global Compact principles. 

In April 2020 Oxford University announced plans to divest its endowment formally from fossil fuels. Oxford University’s Permanent Endowment is invested in the Oxford Endowment Fund, which is actively managed by Oxford University Endowment Management (OUem) and is already effectively divested from fossil fuels. BlackRock has worked with OUem to realise this commitment.

Sarah Melvin, head of UK at BlackRock, said: “We are excited to have been chosen by OUem to design and launch a new product, the iShares Developed World Fossil Fuel Screened Equity Index Fund, which incorporates precise, transparent, exclusionary screens supporting their divestment objectives.” 

Sandra Robertson, CEO and CIO of OUem, said: “In the actively managed Oxford Endowment Fund, for permanent endowment, over the past 12 years we have effectively divested from fossil fuels, and we have funded several innovative groups investing in solutions to climate change. This is an outcome of an active investment process, and a long-term investment theme of resource efficiency. We wanted to similarly design an equity index solution that reflects this ambition in the University’s Capital Account.” 

Columbia Threadneedle expands ESG equity range

16 October 2020

Columbia Threadneedle Investments has launched a duo of responsibly invested funds allocating to emerging market and European equities.

The Threadneedle (Lux) Emerging Market ESG Equities Fund is managed by senior portfolio manager Young Kim, and the Threadneedle (Lux) Pan European ESG Equities Fund, is a conversion of the Threadneedle (Lux) Pan European Equities Fund. The latter will continue to be managed by Ann Steele and Dan Ison, who have been increasing the intensity of ESG analysis in the fund over the past 18 months.

See also: – Q&A: Columbia Threadneedle unveils relaunched UK Sustainable Equity Fund

CIO William Davies said the move to launch the EM ESG fund and convert the pan-European mandate into an ESG vehicle was due to “growing investor demand”, which he described as “one of the most significant shifts in asset management in a generation”.

“The recent European sustainable finance regulations,” he added, “have only served to accelerate this trend. We are pleased to reflect these market developments by adding two new ESG funds to our responsible investment offering, to sit alongside our existing sustainable outcomes fund range.”

The EMs fund will use Columbia Threadneedle’s proprietary responsible investment ratings and research, and combining it with fundamental company analysis, Kim will apply ESG factors to identify growth opportunities and material risks in emerging market companies. The firm said he will focus on “high quality innovative businesses” which can “sustain high returns on capital and strong growth over the long term”.

Kim said: “A growing number of companies in emerging markets now recognise the value of adopting ESG business practices and the potential positive effect it can have on generating additional shareholder returns. By evaluating a company through the ESG lens, we can gain a comprehensive understanding of how ESG risks are considered and used to sustain its long-term future.”

Meanwhile, the pan-European fund will aim to deliver capital growth by investing in companies with sustainable competitive advantages and strong operating practices.

Manager Steele commented: “While the market is still assessing the long-term consequences of the coronavirus pandemic, ESG issues – particularly the significant social impact – have become even more important. They are a key part of the new economic reality, as regulatory oversight covering emissions and social responsibility will continue to grow.”

BNP Paribas adds blue economy ETF to thematic range

14 October 2020

BNP Paribas Asset Management (BNP Paribas AM) has launched a Blue Economy ETF to promote the sustainable use of ocean resources for economic growth.

Listed on Xetra and Euronext, the BNP Paribas Easy ECPI Global ESG Blue Economy UCITS ETF tracks the ECPI Global ESG Blue Economy index, an equally-weighted index providing exposure to 50 large-cap companies selected for their sustainable participation in the blue economy. The index conforms to UN Sustainable Development Goal (SDG) 14: ‘Life below water’.

See also: – Blue bond could help replenish ocean fish stocks by 2040

BNP Paribas AM said the blue economy is defined by the World Bank as the sustainable use of ocean resources for economic growth, improved incomes and jobs, and healthy ocean ecosystems.

Companies in the ETF are selected for their participation in the blue economy and listed according to five categories:

  • Coastal livelihood (protection, eco-tourism)
  • Energy & resources (offshore wind, marine biotech, wave & tidal)
  • Fisheries & seafood
  • Pollution reduction (recycling/waste management, environmental services)
  • Maritime transport

Robert-Alexandre Poujade, ESG analyst in BNP Paribas AM’s sustainability Centre, commented: “The ecosystem of the ocean has characteristics and resources that are essential to our well-being and to the prosperity of the global economy, although their sustainability is now under significant threat.  Whether for tourism employment or offshore wind, the ocean is also a formidable reservoir of biodiversity to be preserved at all costs to maintain our food security and our health, and to protect our coastal areas.  It is also one of our best allies in the fight against climate change, capturing nearly 30% of the CO2 emissions that human activity emits.”

The fund excludes companies involved in systematic violations of the UN Global Compact principle and arms production, and companies that derive more than 10% of their revenues from tobacco, thermal coal extraction or unconventional oil & gas.

It joins the range of sustainable thematic funds at BNP Paribas AM which saw the launch of a circular economy ETF in May 2019.

The BNP Paribas Easy ECPI Global ESG Blue Economy UCITS ETF carries a TER of 0.30%.

Impact fund Snowball opens to wider investors

14 October 2020

Total impact fund Snowball has been opened up to professional investors for the first time.

The fund was launched in 2016 and initially only available to founding partners C. Hoare Bank, Friends Provident Foundation and Skagen Conscious Capital while it built up a four-year track record.

Snowball CEO Daniela Barone-Soares said the fund has now proven its approach and feels it is the appropriate time to open up the £15m to professional investors, and aim to reach £150m assets under management.

See also: – Maximising impact investing and the ‘new normal’: WFH with Snowball’s Daniela Barone Soares

Managed by Peter Baxter and Abigail Rotheroe, the fund investors globally across asset classes in private and public markets targeting an alignment with the UN’S Sustainable Development Goals (SDGs). It targets a return of 3-4% per annum above inflation net of all fees, over the long term. There is a 1% management fee charged per annum.

Snowball CEO Barone-Soares said: “Investment without consideration of its impact on people and our planet is not investment, it is extraction. We exist to change the way the investment industry thinks and acts.

“We want all investors – from fund managers to individuals – to consider that their impact on people and the planet is as important as the financial profit they seek.

“Opening up the fund to professional investors is a key milestone towards making investing for impact available to everyone, and we want to keep reducing the barriers to entry which have historically been high.”

Credit Suisse raises $212m for ocean health fund

30 September 2020

Credit Suisse has raised $212m for the launch of an impact fund addressing ocean health in conjunction with Rockefeller Asset Management (RAM).

The Credit Suisse Rockefeller Ocean Engagement Fund is a listed equities (UCITS) fund, which the group said is the first impact fund to address the UN Sustainable Development Goal 14 – Life Below Water.

See also: – Blue bond could help replenish ocean fish stocks by 2040

RAM will act as investment advisers to the fund using their global equity strategy to choose 30-50 stocks that will generate alpha while promoting a sustainable blue economy. A joint statement from the groups said the team will engage with firms through an active representation of shareholders’ rights is considered throughout the entire investment process, utilising input from The Ocean Foundation, a non-profit dedicated to conserving ocean environments around the world.

The ocean serves as a “tremendous asset to climate change mitigation”, said Credit Suisse, while also creating livelihoods for billions of people. It absorbs 93% of climate heat and sequestering 25% of global CO2 emissions. However, human activities such as energy production, deforestation, maritime transport, and intensive livestock farming “pose a severe threat to ocean health”. The investment firm also highlighted that half of the Great Barrier Reef has died since 2016 yet coral reefs are worth $36bn to the global economy.

As a result, the Credit Suisse Rockefeller Ocean Engagement Fund will have three key ocean themes: pollution prevention, carbon transition and ocean conservation.

Working together, the Ocean Foundation and RAM will also jointly advise portfolio companies to move away from ocean-harming practices through dialogue with management teams.

“The ocean is amongst some of the least invested topics from the UN Sustainability Goals yet more than a third of institutional investors have expressed their interest in investing in the blue economy,” said Marisa Drew, chief sustainability officer and global head of sustainability strategy advisory and finance (SSAF) at Credit Suisse.

“We are happy to be leading the way to help investors to have an impact.”.

Casey Clark, Rockefeller’s global head of ESG investments and co-portfolio manager of the fund, added: “Constructive shareholder engagement is a longstanding and core part of Rockefeller Asset Management’s investment process in our pursuit to create shareholder value and catalyse positive change.

“We are excited about the interest in the fund and the opportunity to partner with Credit Suisse on this innovative solution which we hope will encourage others to increase their focus on the blue economy.”

Franklin Templeton unveils EMs sustainability fund

30 September 2020

Franklin Templeton has announced the launch of the Templeton Emerging Markets Sustainability Fund investing in emerging markets globally that demonstrate good or improving sustainability.

Managed by Edinburgh-based Andrew Ness and Singapore-based Chetan Sehgal, part of the team that also manage the who also co-manage the Templeton Global Emerging Markets strategy, the fund will particularly seek companies whose products and services are aligned to one or more of the six positive outcome areas linked to the UN Sustainable Development Goals (SDGs). The six positive outcome areas are: Basic Needs, Wellbeing, Decent Work, Healthy Ecosystems, Climate Stability, and Resource Security.

The portfolio will consist of 30-50 stocks with a five-year investment horizon, all selected using Franklin Templeton’s proprietary three-pillar ESG inclusion framework that measures:

  • Company’s alignment to positive environmental and/or social areas,
  • Intentionality to maintain or improve the ESG footprint of the company’s operating model, and
  • Transition potential for improvement through engagement as active owners.

It will exclude companies that are involved in weapons, tobacco, coal and unconventional oil and gas extraction, or whose actions have violated the United Nations Global Compact.

Portfolio manager Ness commented: “Our rigorous and holistic three-pillar ESG inclusion framework means that, as well as companies that demonstrate good sustainability criteria, we can invest in companies that may be imperfect and create investor impact by pro-actively engaging with these companies to improve. We believe that our core role as stewards of our clients’ capital is to engage in its responsible allocation, management and oversight to create long-term value for our investors.”

GSAM adds enhanced income bond portfolio

23 September 2020

Goldman Sachs Asset Management (GSAM) has launched a bond fund offering enhanced income.

The GS Global ESG Enhanced Income Bond Portfolio will invest in corporate bonds, securitised credit and emerging market debt across the globe.

Managed by the global fixed income team, which currently manages $700bn, the fund will exclude securities in the tobacco sector or other business models that are inconsistent with widely-accepted norms and values, including companies that violate the United Nations Global Compact principles.

Bonds will also go through the team’s ESG analysis, which included scrutiny of company revenue streams for negative social and environmental factors. Finally, bonds are also scored using GSAM’s proprietary ratings, with the lowest scorers eliminated.

Jonathon Orr, global fixed income portfolio manager, said: “The GS Global ESG Enhanced Income Bond Portfolio makes a conscious effort to avoid companies that in our view exhibit weak ESG profiles. We believe this approach can contribute to long-term performance.”

His colleague Kathleen Hughes, managing director of the GSAM client business, added: “The Covid-19 pandemic has amplified investor focus on environmental, social and governance risks. Our commitment to ESG remains resolute. We believe the GS Global ESG Enhanced Income Bond Portfolio meets a deepening need within the investment world to achieve investment objectives with thoughtful consideration of ESG factors.”

The fund, which is a new sub-fund of the UCITS-qualifying, Luxembourg-domiciled Goldman Sachs Funds SICAV, is available to both institutional and retail clients across Europe.

UBS AM launches suite of Climate Aware strategies

15 September 2020

UBS Asset Management (UBS AM) has unveiled a new range of Climate Aware strategies across a range of asset classes, with four index products and one active product now available to investors.

The new cross-asset suite of products consists of five portfolios: UBS Climate Aware World Equity Enhanced Indexing, UBS Active Climate Aware Equity (Global), UBS USD/EUR Climate Aware Corporate Bonds, UBS Climate Aware Corporate Bonds Enhanced Indexing and UBS Climate Aware Government Bonds Enhanced Indexing.

The products are based on the firm’s proprietary Climate Aware framework, which was launched in 2017 as part of its Climate Aware passive equity strategy, with the aim to help clients reduce the carbon footprint of their investments.

The firm said the launch of the new suite was a response to client demand for strategies that would allow them to align their investment with environmental goals.

Suni Harford, president of UBS Asset Management, said: “The degree to which investors are embracing ESG as a fundamental investment driver, particularly around the issue of climate risk, is stark.

“As demand continues to grow and sustainable assets amass more capital, we will see the investment landscapes transform even further. This is a trend which we believe is here to stay and investors in today’s markets must understand the effect that climate is having on their portfolio.”

The investment framework for the new strategies follow a three-pronged approach. This consists of portfolio mitigation by lowering investment exposure to carbon risks; portfolio adaptation through increasing investment exposure to climate-related innovation and solutions; and portfolio transition, which sees the investments aligned to a chosen climate glidepath.

Barry Gill, head of investments at the firm, said: “Our Climate Aware approach sits at the heart of our sustainable investment proposition and is underpinned by our active stewardship programme. This sends a clear message to the companies in which we invest and allows us the opportunity to engage with these companies to help them move toward a lower-carbon future.

“Further, by using a consistent methodology and growing the pool of assets invested using this approach, we can drive further positive change on behalf of our clients.”

Michael Baldinger, head of sustainable and impact investing, added: “There is strong investor appetite to direct capital towards a lower-carbon future and contribute to a climate-smart world. Not only does our climate aware approach mitigate the risk of climate change, it also offers investors the potential to invest in those products and solutions best positioned to solve the challenges of a warming world.”

DWS adds US corporate bond ETF to ESG range

11 September 2020

DWS has broadened its ESG fixed income exposure with  the launch of a US dollar corporate bond product.

The group has launched the Xtrackers ESG USD Corporate Bond UCITS ETF providing exposure to over 1,000 US dollar investment-grade corporate bonds complying with ESG criteria. It references a Bloomberg Barclays index with MSCI ESG research.

See also: – DWS: The outcomes we cannot afford to see from covid-19 crisis

Listed on the London Stock Exchange and Germany’s Xetra stock exchange, the ETF carries an annual all-in fee of 0.16%.

Meanwhile, DWS has also launched a euro-hedged share class of its existing Xtrackers MSCI World ESG UCITS ETF, which tracks the MSCI World Low Carbon SRI Leaders Index. This follows the July launch of a new Xtrackers ETF providing exposure to the ESG EUR corporate bond short duration market.

“These are just the latest additions to our rapidly expanding suite of DWS Xtrackers ETFs designed to meet the surging demand for ESG exposure,” said Simon Klein, DWS’s global head of passive sales.

BlackRock unveils multi-asset ESG ETFs

10 September 2020

BlackRock has launched a set of multi-asset ESG ETFs under its iShares banner.

The BlackRock ESG Multi-Asset ETF range includes three risk profiled products – Conservative, Moderate and Growth – and all aim to deliver a total return.

Managed by Rafael Iborra and John Wang, members of the multi-asset team, the group said the funds will have higher ESG scores relative to traditional ETFs.

Joe Parkin, head of banks and digital channels in the UK at BlackRock, commented: “There has never been a more important time for people to take control of their financial wellbeing. This choice of three ready-built portfolios has been designed to help more people invest money towards their long-term financial goals with ease, while benefitting from investment expertise across BlackRock.

“We are doubling down on the characteristics that we know attract people to ETFs, to achieve broad exposure to the markets in an ESG and risk conscious way.”


Earlier this year, BlackRock declared it will make sustainability its “new standard” for investing following growing criticism over its failure to address climate-related risks.

In said it would be overhauling its current strategy and bring in a raft of new changes to drive ESG integration across its investment processes.

Tom Bailey, ETFs specialist at interactive investor, said the multi-asset ESG range was another step in that direction: “The decision by BlackRock to launch a range of multi-asset ESG ETFs is part of the company’s broader push into ESG and socially responsible investing. Larry Fink, the chief executive of BlackRock, has often spoken about his desire to increase ESG options to investors. As he wrote in his annual letter to clients earlier this year (January 2020): ‘We believe that sustainability should be our new standard for investing.’ He also noted that the company plans to double the number of ESG ETFs it offers over the next few years.

“But alongside a no doubt sincere belief in the inherent merits of ESG investing, there are two factors likely driving BlackRock’s ESG agenda.

“First, investors are now believed to be increasingly ESG conscious. Second, BlackRock in my opinion likely views offering ESG investing options as a vital way to distinguish itself from the other big index fund providers.

“Big index fund providers’ flagship funds charge less than 10 basis points. As a result, it is no longer just enough for the big index fund providers to compete on the basis of fees – providing more niche and tailored products is now also vital. By offering this range of ESG multi-asset ETFs, BlackRock is trying to place itself as the leader among other big index fund providers when it comes to ESG investing.”

The new funds all carry an OCF of 0.25%.

BlackRock FundBonds (%)Stocks (%) Volatility Targets
BlackRock ESG Multi-Asset Conservative Portfolio UCITS ETF80%20%2-5%
BlackRock ESG Multi-Asset Moderate Portfolio UCITS ETF49%51%5-10%
BlackRock ESG Multi-Asset Growth Portfolio UCITS ETF25%75%10-15%
Source: BlackRock, June 2020

Rize lists food and education ETFs

3 September 2020

European thematic ETF provider Rize ETFs has launched two products investing in the sustainable food ecosystem and digital education.

Both ETFs have been admitted to trading today (3 September) on the London Stock Exchange, Deutsche Börse and Borsa Italiana.

FOOD

The Sustainable Future of Food UCITS ETF (FOOD) has been developed in conjunction with US equity research firm Tematica Research.

Rize said the premise of the fund lies in the “well-documented global challenge of providing healthy, affordable and nutritious food to a growing global population”, while at the same time “reducing harm to the environment”. It replicates the Foxberry Tematica Research Sustainable Future of Food Index and consists of 44 stocks across developed and emerging markets.

See also: – ETFs playing an increasing role in ESG exposure

FOOD, which Rize said is the first ETF of its kind, will invest in companies that are innovating across the food chain to build a more sustainable, sector and fair food system across the world.

Stuart Forbes, co-founder of Rize ETF, explained: “The security and sustainability of our food system is one of the world’s most pressing challenges. The good news is that the food industry has begun to respond. We see expanding plant-based protein options, new technologies penetrating farming, aquaculture and supply-chains and changes in the packaging used to wrap our food, among many other things.

“On the consumption side, we are witnessing a groundswell in consumer consciousness around what they’re putting inside their bodies and how that impacts the planet’s natural ecosystems. As the food system revolutionises, we wanted to build an ETF that could capture the tailwinds arising from the wide array of supply side and demand side catalysts in the food sector,”

LERN

Meanwhile, the Rize Digital Learning UCITS ETF (LERN) has been created in collaboration with HolonIQ, a global education market intelligence firm. The ETF will use its proprietary classification system of companies that identifies market leaders in digital and lifelong learning technologies.

Rize said LERN will provide investors with exposure to companies that are “redefining how education is accessed, resourced and consumed around the world to deliver positive results for the individual and society”.

HolonIQ has found that expenditure on education and training from governments, parents, individuals and corporates continues to grow to new highs, partly due to the global pandemic, and is expected to reach $10trn by 2030.

Patrick Brothers, co-CEO at HolonIQ, commented: “The surge in EdTech spending brought on by Covid-19 is expected to re-calibrate to a longer-term integration of digital technologies, and transition to much higher adoption of online education over the coming years. 

“Part of this transition includes significant ‘infrastructure catch-up’ required for managing learning, data and administration as most schools and colleges are still at the very start of a long digital maturity journey.In addition to EdTech’s primary role supporting the formal education sector, B2C EdTech models are now on the rise as students, parents and workers increasingly seek learning support and upskilling for supplemental and/or more direct academic and career outcomes.”

LERN replicates the Foxberry HolonIQ Education Tech & Digital Learning Index and consists of 35 stocks across developed and emerging markets.  0.45% per annum.

Both ETFs carry a fee of 0.45% per annum.

In February 2020, the firm has launched the Rize Cybersecurity and Data Privacy UCITS ETF and the Rize Medical Cannabis and Life Sciences UCITS ETF.

AP1 seeds Somerset EM Future Leaders Fund

2 September 2020

The Swedish National Pension Fund, Första AP-fonden (AP1), has backed a new fund from UK-based Somerset Capital investing in emerging market securities with ESG credentials.

Somerset’s Emerging Markets Future Leaders UCITS Fund is co-managed by Edward Robertson and Anthony Linehan. It will invest mainly in medium-sized emerging market companies with a market cap between $750m and $13bn.

The pair will target companies that can “grow earnings, book value and cash flow per share sustainably over a market cycle” after passing Somerset’s independent criteria around ESG issues, and will exclude stocks in the tobacco industry and those relating to fossil fuels.

It will be a concentrated portfolio of 40-50 companies with a typical holding period of three to five years.

It has been seeded with circa $350m by AP1, a pension fund that Somerset has worked with since 2013 and is also an investor in the firm’s Frontier Markets Fund.

Co-manager Linehan said emerging markets have been “heavily out of favour for some time”, but the recent volatility has given investors “an opportune moment to buy into high quality smaller and medium-sized companies at very attractive valuations”.

“Our long experience of investing in these markets has allowed us to develop a framework for identifying the characteristics that we believe are critical for any company wishing to be a future industry leader. These include evidence of a strong competitive position, the financial muscle to get through the next down cycle and the ability to navigate regulatory and consumer preference changes relating to ESG.

“The era of badly run, corrupt companies making big profits is coming to an end. Being able to distinguish between those that take corporate governance and sustainability issues seriously and those that don’t will be absolutely crucial in identifying future winners and losers.”

The fund will be a daily dealing UCITS ICAV domiciled in Dublin and will be available in sterling, US dollar and other currencies on request.

AXA IM adds multi-asset impact fund

1 September 2020

AXA Investment Managers has brought a multi-asset impact fund to the European market.

The AXA WF Multi Asset Optimal Impact Fund is managed by Serge Pizem, head of multi-asset, and his team and sits within the firm’s Optimal Income range.

It is also part of the group’s impact fund range, which in May the firm pledged will donate 5% of management fees to charity.

The impact range includes:

  • AXA WF Global Green Bonds
  • AXA WF Framlington Women Empowerment
  • AXA WF Framlington Clean Economy
  • AXA WF Framlington Human Capital

The new multi-asset product will invest in securities demonstrating “positive social and environmental impact”, while aiming to” generate financial performance based on strong convictions”. The managers will adopt a flexible approach to navigate the changing macroeconomic environment.

It can invest from 0% to 100% in debt securities, including inflation-linked, green, social and sustainable bonds, and from 0% to 75% in equities.

The team will use quantitative and qualitative filters combined with top-down ESG research and bottom-up analysis, to select the most relevant companies. Contribution to the UN’s Sustainable Development Goals (SDGs) will also be monitored with a particular focus on the following:

  • Environment: Energy transition – smart energy (SDG 7), sustainable transport, sustainable industry (SDG 12) and resource scarcity i.e. recycling and preservation;
  • Health & wellbeing: Personal security and healthcare (SDG 3) solutions;
  • Inclusion: Financial inclusion, housing and basic infrastructure (SDG 11);
  • Empowerment: Women (SDG 5), human capital and livelihoods (SDG 8).

Head of multi-asset Pizem said: “From both investors and companies, there is an undoubtable rising of awareness of the challenges facing society today from all areas of the ESG spectrum. The Multi Asset Optimal Impact Fund focuses on finding businesses that are committed to create positive and measurable impacts on our society, in line with our impact investing approach.

“By integrating positive ESG criteria, and excluding certain assets, the impact investing element of the fund covers a broad range of complex social and environmental objectives that aim to build a better future, while our multi-asset approach gives us the ability to adapt allocation to the evolution of financial markets. In a nutshell, the objective of the fund is to be good for the people and good for the planet.”

The fund is registered for sale in Austria, Belgium, Switzerland, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden and the UK.

Evli unveils global and responsible factor fund

28 August 2020

Evli Bank is launching a new responsible fund for its equity factor fund range. 

The Evli Equity Factor Global fund will focus the most responsible companies, filtering out stocks through an ESG-based screening process. 

This is the latest addition to Evli’s equity factor fund range that it launched in Europe and the US in 2015-16. 

This range already contains the Evli Equity Factor Europe fund, the Evli Equity Factor USA fund and the Evli Factor Premia fund. 

So far the new fund is only available in Finland and Sweden although Evli Bank says access will be broadened to more countries shortly.  

Like these other funds, the Evli Equity Factor Global fund will focus on the same four factors: value, momentum, quality and low risk.

The fund’s management team includes Evli’s head of systematic funds Peter Lindahl, who says low carbon analysis has been part of the team’s process for four years. 

“Last year, we transformed this into a more comprehensive ESG approach, using both exclusion criteria and selection of the best companies within each sector,” he said.  

“We have found that ESG investing has worked effectively in factor funds. Now, in our new global factor fund, we will continue to focus on those companies that receive a high ESG rating.” 

From a universe of around 5,000 equities, only the best 600 companies will be chosen for the global fund’s holdings. This initial universe is made from a global selection of the most responsible three quarters of companies based on ESG assessment by research firm MSCI.  

The management team also includes senior portfolio manager Antti Sivonen and portfolio manager Mattias Lagerspetz. 

Evli Bank already has a history of ESG investing and signed up to the UN’s Principles for Responsible Investment in 2010 and has been an investor member of the Carbon Disclosure Project since 2007.  

Fulcrum launches Paris-aligned climate change fund 

3 August 2020

Fulcrum Asset Management has unveiled an actively managed climate change fund aligned with the Paris Agreement.

The Fulcrum Climate Change fund is a diversified, global equity SICAV, domiciled in Luxembourg and seeded with £70m of asset at launch.

The vehicle is expected to hold between 150 and 200 stocks invested across 25 themes, with all companies in the portfolio having a temperature below 2.5 degrees and a weighted average portfolio temperature below 2 degrees. 

Andrew Stevens, Fulcrum CEO, said the launch was in response to client demand for an “ambitious and innovative climate change solution”.

“We believe we have a unique opportunity to bring to the market something that could have a real effect on climate change mitigation, while still providing diversified exposure to the global equity market.” 

To create the fund, Fulcrum worked with environmental transition experts Iceberg Data Lab as well as collaborating with Arvella Investments, who were looking across the market for such a product.  

Benoit Mercereau, CIO at Arvella Investments, commented:  “With most major global benchmarks on a 3-degree trajectory, we are pleased to have been able to work with Fulcrum to design a fund that is not only providing us with access to the global equity market but doing so in a way that is in-line with a below 2°C trajectory.” 

The fund aims to drive re-allocation of capital by investing in companies that are “on-track” to meet the Paris Agreement’s temperature target. Fulcrum also intends to engage with companies to encourage further decarbonisation, climate-related disclosure and climate target setting. 

Richard Romer-Lee, managing director at Square Mile Investment Consulting and Research, said: “There is broad popular support for taking active steps to ensure that the objectives of the Paris Agreement are met, and by allocating capital to companies that are aligned with its principles and which encourage the transition to a greener economy, asset managers can make a significant impact in the battle against climate change. 

“We believe that the already strong investor support for strategies which embrace a responsible approach to investment can only grow, and so we are delighted to see Fulcrum innovate in this area with the launch of this fund.” 

Morgan Stanley IM adds two sustainable European bond funds to suite

3 August 2020

Morgan Stanley Investment Management (MSIM) has launched two sustainable actively-managed funds investing in European fixed income.

The two funds – MS INVF Sustainable European Corporate and the MS INVF Sustainable European Strategic – will aim to make a positive contribution across key sustainability themes, such as decarbonisation, UN SDGs, and maximising allocation to green bonds, while also generating a return in line with existing strategies.

Brian Weinstein, head of global fixed income, said:These two new funds are an evolution of existing market-leading funds. We have listened to feedback from our clients and drawn on expertise from across our team to create bespoke, next-generation sustainable investment products.”

The products will be managed using a differentiated multi-dimensional approach that combines individual issuer research with top-down sustainability objectives.

Both funds will exclude issuers in controversial sectors – such as weapons, tobacco and coal – and with poor sustainable business practices. Instead, them will invest in those issuers whose ESG scores are within the top 80% in their respective sector, based on the firm’s proprietary ESG scoring methodology.

The funds are designed to be less carbon intensive than their respective indices and will aim to invest at least 10% of the portfolio in green and other labelled sustainable bonds.

The corporate bond fund will invest exclusively in corporate credit, while the strategic fund will invest across the broad fixed income universe, including developed and emerging market treasury and sovereign bonds, bonds issued by supranationals and agencies, investment grade and high yield corporate credit as well as securitised products. 

Dipen Patel, manager of the corporate fund, said: “The ultimate objective of both funds is to create interesting and diversified opportunities for our clients while at the same time carefully balancing ESG considerations with the aim of delivering attractive risk-adjusted returns.”

Leon Grenyer, manager of the strategic fund, added: “The MSIM fixed income team and ESG specialists have a long track record of delivering strong investment returns through the market cycle. These new funds offer an exciting opportunity for investors seeking the advantages of fixed income investments, whilst benefiting from Morgan Stanley’s firmly held sustainable investing principles.”

Resonance brings Supported Homes Fund to UK market

28 July 2020

UK social impact business Resonance has launched the Supported Homes Fund, providing accommodation to adults with learning disabilities, autism and mental health challenges.

Working alongside Reside Housing Association and United Response, Resonance has created the fund to provide a solution to the acute housing shortage these individuals face, as they currently remain living in inappropriate housing or on long waiting lists.

For investors, the fund aims to provide a financial return from rent and capital appreciation while focusing on how to achieve a positive social impact through housing and supporting people with learning disabilities, autism or mental health challenges, and enabling them to live independently. Resonance said it will reduce levels of risk for investors, for example by providing leases with reasonable rent levels, appropriate break clauses, and fair rental uplift not normally associated with these models.

Initial investment support has come from Greater Manchester Combined Authority, Big Society Capital and the Barrow Cadbury Trust, amounting to £10m in total.

The fund will use this to buy, refurbish and adapt or potentially build residnetal properties in communities. Initially,  half of these are being based in Greater Manchester, but the plans are to roll out across the UK and meet specific needs of every individual.

Simon Chisholm, Resonance’s chief investment officer, said: “The initial investments from Big Society Capital, Greater Manchester Combined Authority and Barrow Cadbury will enable us to attract like-minded investors into the fund so that we can purchase even more homes for people with learning disability, autism or mental health problems currently still living in inappropriate accommodation.

“Living in the right home will help make a real difference to their lives, enabling them to live with choice and independence in their local communities, close to their families. We are also delighted to be working alongside our founding charity partners United Response and Reside Housing Association who will provide support to individuals housed, and also look forward to working with others in due course.”

Diane French, chief executive of Reside Housing Association, added: “During my career I have seen the right housing matched with the right support transform lives. If that is within our power then we should be doing everything we can to make it possible for everyone to live their best life and yet too many people with learning disabilities and other support needs still live in institutions or struggle to find the right housing to meet their needs. This fund can help us be a solution for more people.”

Franklin Templeton brings smart-beta climate ETFs to European market

27 July 2020

Franklin Templeton has added to its LibertyShares range with two Paris Aligned Climate ETFs.

Available to European investors, the Franklin STOXX Europe 600 Paris Aligned Climate UCITS ETF and Franklin S&P 500 Paris Aligned Climate UCITS ETFare smart-beta products compliant with the EU’s new Paris Aligned Benchmark (PAB).

Last week, the European Commission announced it had adopted technical regulations for climate benchmarks, which will help investors align their investments with the Paris climate goals.

Franklin Templeton’s latest ETFs will track the new Paris-Aligned version of the STOXX Europe 600 and S&P 500 benchmarks, which will seek EU Climate Benchmark certification. These indices aim to align with the climate disclosure recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).

Rafaelle Lennox, senior ETF product specialist at Franklin Templeton, said the firm has collaborated with index providers, S&P Dow Jones  Indices and Qontigo on the new ETFs and selected the parent benchmarks the team believes is most relevant to clients, S&P 500 & STOXX Europe.

“Both index providers have partnered with carbon data specialists in the assessment of companies’ climate change risk profiles, policies, targets and decarbonisation trajectory in the development of these technical and ground-breaking climate benchmarks,” Lennox said. “These Paris-Aligned indices have ambitious carbon reduction targets but also meaningful broader ESG components, thus, creating a core sustainable solution.”

The ETFs provide exposure to European and US large- and mid-cap stocks, respectively, with the aim of reducing climate change risk and access opportunities in the transition to a low carbon economy.

Managed by Dina Ting, head of global index portfolio management, and Lorenzo Crosato, ETF portfolio manager, the vehicles each carry a TER of 0.15%.

Caroline Baron, head of ETF sales EMEA, Franklin Templeton, commented: “Our new Paris Aligned Climate ETFs will provide access to ‘forward-looking’ investment solutions at a very competitive cost of 15 basis points and will be the cheapest climate ETFs in the European market.

“These new launches are an extension of our current sustainable investment offering within our strong line up of 16 smart beta, active and passive ETF strategies for European investors. We believe these new solutions will appeal to a wide range of investors—specifically insurance companies, discretionary wealth managers and family offices.”

The funds will list on the Deutsche Börse on 30 July and on the London Stock Exchange and Borsa Italiana on the 31 July. They will also be registered in Austria, Denmark, Finland, Sweden and Switzerland thereafter.   

Amundi expands SRI ETF range with euro aggregate bond fund

16 July 2020

Amundi has launched a euro-denominated aggregate SRI bond ETF on the Euronext Paris with an ongoing charge of 0.16% per annum.

The Amundi Index Euro Agg SRI UCITS ETF DR – EUR is an addition to the group’s existing three-strong range of SRI ETFs offering exposure to corporate fixed income.

The largest product in the range is the Amundi Index Euro Agg Corporate SRI – UCITS ETF DR, with an ongoing charge of 0.16%, with the other two – Amundi Index Euro Corporate SRI 0-3 Y and Amundi Index US Corp SRI – charging 0.12% and 0.16% respectively.

The fund will offer investors the opportunity to gain exposure to both government and corporate bond markets. Based on a customised SRI methodology, this ETF implements a systematic negative screening while maintaining a broad market exposure resulting in a tracking error under 1%.

Fannie Wurtz, head of Amundi ETF, indexing and smart beta, said: “This new listing demonstrates our commitment to meeting investors’ increasing demand for ESG passive solutions.

“The Euro Aggregate exposure is an essential building block that strengthens our existing SRI range, offering investors the opportunity to build a diversified responsible investing portfolio tailored to their individual objectives.”

BNP Paribas unveils long/short EARTH Fund

15 July 2020

BNP Paribas Asset Management has announced the launch of a long/short equity fund investing addressing environmental trends.

BNP Paribas Environmental Absolute Return Thematic Fund (EARTH) will identify opportunities among those companies that are facing or addressing significant environmental challenges.

It is managed by Edward Lees and Ulrik Fugmann, who also manage the long-only BNP Paribas Energy Transition.

The pair will combine thematic, top-down macro, industry and regulatory research with fundamental company analysis. This is supported by proprietary quantitative models for portfolio construction, risk management and alpha screening.

The group, which transformed its entire active funds range to become 100% sustainable last year, said the portfolio will invest across global developed and emerging market companies with a market capitalisation of above $1bn, and will be mapped to one or more of eight the UN’s Sustainable Development Goals (SDGs).

Long positions will be in companies which the team deem to have the most promising and innocative businesses within the energy, materials, agriculture and industrials markets that are providing solutions to environmental challenges.  These are paired with short positions in companies with unsustainable or technologically inferior business models vulnerable to transition risk. 

Lees said: “We believe that companies positioned to help address the significant environmental challenges we face will outperform those that either take no action or indeed contribute to these issues. The latter will increasingly be at risk of having stranded assets and will be forced to take write-downs. 

“Meanwhile, as population growth boosts demand for food, water and energy, causing increasing CO₂ emissions, waste production and unsustainable consumption, the market for solutions to meet these needs could amount to trillions of dollars and will be increasingly encouraged by governments.”

Co-manager Fugmann added: “EARTH offers ur investors access to the sustainable investment theme within an innovative long/short framework, enabling them to benefit from positive change in both high and low carbon intensive sectors, with the aim of delivering long-term absolute returns while reducing risk during periods of market drawdown.”

Neuberger Berman targets Japanese equities with ESG fund

8 July 2020

Neuberger Berman has launched a Japanese ESG equity fund, ESG Clarity can exclusively reveal.

The Japanese Equity Engagement strategy will invest in companies with a “willingness to change” and seek better risk-adjusted returns relative to its benchmark over the long term.

It will promote active engagement with the Japanese small- and mid-cap companies – those with a market capitalisation of lower then Y1trn – it invests in through constructive dialogue.

The group said the portfolio will be highly concentrated and run by Tokyo-based Keita Kubota, who is head of Japanese equities at Neuberger Berman. He joined in 2019 and leads a four-strong team of portfolio managers. They will draw upon the expertise of Neuberger Berman’s ESG investing and global equity research teams, and be assisted by appointed director of Japan investment stewardship, Kei Okamura, who joined Neuberger Berman in March this year.

Manager Kubota said: “Corporate governance has never been more firmly on the Japanese government’s agenda, and we are seeing a new level of open-mindedness amongst companies to change and improve. We believe now is the time to find undervalued Japanese equities through using a fundamental research approach with active and constructive engagement. Our team’s local knowledge, coupled with Neuberger’s global equity research expertise, will be key to generating long-term returns for clients.”

Schroders and Fidelity to manage MIF fund

7 July 2020

European asset management platform Mediolanum International Funds (MIF) has launched a Global Demographic Opportunities Fund, a multi-manager mandate featuring Schroders and Fidelity.

The find will invest in global securities via the multi-manager approach, aiming to take advantage of changing social and demographic developments around the world.

There are three main themes the fund will seek to gain exposure to:

  1. The Silver Economy: Companies and sectors set to benefit from the increased consumption caused by the higher average life expectancy and new needs of people over 60
  2. New Consumers: Companies and sectors set to benefit from consumers between the ages of 20 and 40 who’s spending behaviour differs from previous generations
  3. Population Growth: Companies and sectors at the forefront of developing infrastructure and offering solutions that address the scarcity of resources caused by world population growth

Initially, the fund will be managed by Alex Tedder, head of global and US equities at Schroders and Aneta Wynimko, portfolio manager at Fidelity.

Christophe Jaubert, CIO & head of research multi-management at MIF, commented: “Over the last century, life expectancy across the globe has doubled and the projections for the next 30 years indicate that by 2050 we will reach almost 10 billion people, and that one in five of us will be over the age of 65. Every sector of the economy is facing dramatic change and the current global pandemic will undoubtedly amplify and accelerate these changes. This fund aims to capitalise on the opportunities created by these new trends in consumption and the changing demographics.”

The UCITS-compliant fund, which has been registered in Dublin, will be made available to investors in Italy and Spain through Mediolanum Banking Group Family Bankers, a professional network of financial planners.

MIF is the Irish asset management company of the Mediolanum Banking Group with €38bn assets under management as at the end of June 2020 and 61 funds in its range.

PGIM adds ESG corporate bond fund

1 July 2020

PGIM Investments has unveiled a global corporate ESG bond fund, the first in a newly created suite of PGIM Fixed Income’s ESG offerings being made available to non-US investors

Managed by PGIM Fixed Income, the PGIM Global Corporate ESG Bond Fund will invest fully across the fixed income security spectrum, including investment grade, high yield and quasi-sovereign bonds denominated in US dollars, euros, yen, sterling and emerging market currencies,  while also utilising the firm’s ESG rating framework; ratings are assigned to every issuer following analysis by more than 110 analysts which is overseen by the ESG committee.

It seeks total return, comprised of current income and capital appreciation in excess of its benchmark, the Bloomberg Barclays Global Aggregate Corporate Total Return Index—while focusing on ESG principles.

The fund is managed by Edward Farley, head of the European investment grade corporate bond team, who also manages the existing PGIM Global Corporate Bond Fund.

He said: “We fully recognise the importance of integrating ESG factors in our global investment research, decision making and portfolio management and believe that ESG issues can affect the performance of investment portfolios. Our investment approach emphasises and actively seeks to identify companies with sustainable, long-term competitive advantages. Within this context, we take into consideration governance, ethics, and overall social and environmental impacts.  We consider relevant ESG factors in our investment process to work toward our ultimate fiduciary duty—searching for the highest risk adjusted returns for our clients.”

The fund has initially been registered for sale in the UK, Denmark, Norway, Sweden, Germany, Switzerland, Austria and the Netherlands.

Candriam’s new fund targets circular economy transition

30 June 2020

European asset manager Candriam has expanded its thematic fund range with the launch a fund investing in a the transition to a circular economy, while also donating a proportion of the management fees to charity.

The Candriam SRI Equity Circular Economy Fund enables retail and institutional investors to participate in the transformational growth story of global supply chains becoming more ‘circular’. The concept, Candriam said, provides an alternative to the current linear economic model ie. take, make, dispose by avoiding waste and reducing the need for virgin raw materials and seeks to increase the re-use or recycling of materials, including resource efficiencies.

It added resource depletion and inefficient waste management are having significant and costly effect on the economy, society and ecosystem, and replacing the ‘line’ with a ‘circle’ is imperative towards a sustainable future.

Koen Popleu, lead portfolio manager of the new fund who is supported by co-manager Monika Kumar, commented: “The backlash against single use plastic and the growing popularity of plastic-free goods has shown that regulators and consumers support the transition to a circular economy. In the face of reputational risk and consumer boycotting, companies have decided to drastically increase their use of recycled plastic packaging and transform their operational processes.”

The fund will invest in companies that provide new technologies and innovations enabling the transition to a circular economy, with the aim of outperforming over the long term.

Candriam also highlighted the world is currently only 8.6% circular (according to the Circular Gap Report 2020), demonstrating the breadth of opportunities  – the firm predicts the circular market will represent an estimated $4.5trn economy by 2030.

The group has also committed to donating up to 10% of the fund’s net annual management fees to charities promoting the transition to the circular economy. One such organisation is Close the Gap, an international social enterprise that aims to bridge the digital divide by offering high-quality, pre-owned computers donated by European and international companies to educational, medical and social projects in developing and emerging countries.

Vincent Hamelink, CIO at Candriam, commented: “Sustainable investing has been at the heart of our business for 25 years and we are proud to launch the Candriam SRI Equity Circular Economy Fund. As we strive to promote a zero waste economy and deliver the UN Sustainable Development Goals, the move towards a circular economy will be an essential part of our transition towards a more sustainable future.”

Morgan Stanley IM in global sustainable launch

30 June 2020

Morgan Stanley Investment Management (MSIM) has announced the launch of Morgan Stanley Global Balanced Sustainable Fund, to be managed by Andrew Harmstone, head of the global balanced risk control strategy.

The fund will invest in global equities and fixed income securities that have the potential to generate a measurable, positive environmental and social impact, alongside a financial returns. It will also tilt equity exposures towards holdings that support the transition to a net-zero carbon economy, in line with the Paris-aligned target.  MSIM said it combines the team’s risk-controlled asset allocation process with a multi-dimensional framework for sustainable investing.

Harmstone said: “Our approach is highly flexible and, when we anticipate volatility, we are able to adjust exposure of the portfolio to a range of asset classes. The Global Balanced Sustainable Fund brings exciting opportunities to deliver attractive risk-adjusted returns across a market cycle, whilst at the same time bringing tangible environmental and social benefits.”

It is expected that 5% to 30% of assets will be invested with managers who explicitly aim for positive environmental and social outcomes, and the portfolio team will also engage with selected companies via dialogue and proxy voting, to enhance the impact made by portfolio companies.

Natixis IM unveils ESG fund of funds range

25 June 2020

Natixis Investment Managers has expanded its ESG offering with the launch of a three-strong Luxembourg-domiciled range of fund of funds.

The products will combine the expertise of the group’s affiliate fund managers with portfolio construction and asset allocation by Natixis Investment Managers Solutions, and will be overseen by the group’s in-house ESG experts.

The three funds – Natixis ESG Conservative, Moderate and Dynamic – are all multi-asset offerings targeting different levels of risk. At launch they will have exposure to 14 funds from five Natixis affiliates.

They are managed by the multi-asset portfolio management team, which is part of Natixis Investment Solutions, with Nicolas Bozetto as lead manager.

Harald Walkate, head of CSR & ESG at Natixis IM, said: “We have launched a new ESG fund range at a time when we believe the importance of ESG has never been more visible.  We believe in ESG that makes a difference by helping to identify risk and drive financial performance.”

The group uses a proprietary selection methodology, called Conviction & Narrative, which it developed specifically for the new funds.

James Beaumont, head of multi-asset portfolio management at Natixis Investment Solutions, added: “The ESG market is evolving rapidly and means many different things to different people. These funds give clients access to a wide range of ESG strategies across all asset classes in a risk-controlled manner.

“Our affiliates’ broad capabilities across the whole ESG spectrum give us an enviable breadth of investment opportunities, whilst having our process challenged by Natixis’s in-house ESG experts to stay true to our core beliefs.”

The funds are currently available in Belgium, France, Netherlands and Spain, but this list will be expanded in July to include the UK.

ASI targets investment grade with ESG fund

24 June 2020

Aberdeen Standard Investments (ASI) has added a responsibly invested strategy to its range in the form of a global corporate bond fund.

The Aberdeen Standard SICAV I – Global Corporate Bond Sustainable and Responsible Investment Fund will primarily invest in investment grade debt and debt-related securities issued by corporations worldwide.

Bonds will be selected by the global investment grade portfolio management team who will scan the universe in search of companies that demonstrate strong management of ESG. The fund’s process excludes companies that have controversial business activities, or are rated poorly on their management of ESG risks by the on-desk credit and integrated central ESG resources.

The management team will also endeavour to engage with companies to actively influence the management of ESG risks and opportunities. The fund will target a carbon footprint that is lower than the benchmark.

Samantha Lamb, head of ESG fixed Income and global investment grade portfolio manager at ASI, said:“The goal of this new fund is to make a positive difference – for our clients, society and the wider world. It’s about investing in companies doing the right things to create portfolios that will help our clients achieve their long-term financial goals. The Fund supports making fully-informed decision, delivering positive change and in turn, driving higher standards and stronger returns.”

Ossiam unveils smart beta carbon reduction ETF

18 June 2020

Ossiam, the smart beta arm of Natixis Investment Managers, has launched a euro government bond ETF tracking a carbon reduction index.

The Ossiam Euro Government Bonds 3-5Y Carbon Reduction UCITS ETF 1C (EUR) has been listed on the Xetra exchange in Germany with €200m of seeded investor capital.

Tracking the ICE (Intercontinental Exchange) 3-5 Year Euro Government Carbon Reduction Index, it will hold eurozone bonds with a 3- to 5-year maturity and incorporate a systematic reduction of the portfolio’s carbon footprint by weighting dependent on countries’ respective carbon footprints.

The ETF will have an average fossil carbon emission target 30% lower than that of the investment universe. It carries a TER of 0.17%.

Bruno Poulin, CEO of Ossiam, said:We are very pleased to announce the launch of our latest ETF to add to our ESG product range. It’s an additional component for investors who wish to manage their portfolio’s total carbon footprint.”

BMO GAM makes foray into Asia with responsible fund launch

11 June 2020

BMO Global Asset Management (BMO GAM) has added a 14th fund to its suite of responsible investment funds, with the BMO LGM Responsible Asian Equity Fund, replicating an existing income fund investing in the region.

It will be run by the firm’s emerging market equity specialists, LGM Investments, with Gokce Bulut and Christopher Darling being named as lead portfolio managers.

The new fund will replicate the BMO LGM Asian Growth and Income Fund, which already incorporates ESG investment considerations within the investment process, but will now formally employ BMO GAM’s Responsible Investment philosophy. 

It will invest in “high quality, cash generative companies with sustainable business models”, the firm said, as well as Asian companies that meet “strong governance standards”, but also have a positive contribution to the development of these markets.

The strategy will also seek to be exposed to key global shifts relevant to emerging markets secular growth, including: health and wellbeing; food and nutrition; energy transition; responsible finance; sustainable infrastructure; and technological innovation.

Fund manager Bulut said: “Investment in emerging Asia offers a wealth of opportunities. It is a highly diverse region culturally, economically and from a developmental perspective. As a long-term investor this gets me very excited.

“We are convinced that the best businesses are the ones that are addressing sustainability challenges head on, while also establishing themselves as reliable quality holdings. These are the companies we want to hold in our portfolios for the long term.”

The fund carries an AMC of 40bps. European and US dollar share classes are offered to clients in the UK and Europe.

Blackfinch moves into retail space with ESG funds

11 June

Blackfinch has launched four multi-asset funds aligned with ESG considerations.

In its first move into the retail investment space in the UK, it has added four Blackfinch Asset Management Adaptation Funds to its model portfolio service (MPS) following client feedback indicating demand for ESG propositions was set to increase.

The global funds invest in active and passive funds, as well as investment trusts, ETFs, bonds and direct equities. The Adaptation funds will use a broader investment remit to include investments where a positive impact is clear, and employ positive screening to evaluate and invest in funds and firms that are paying close attention to the impact they make on society and the environment. Any investments that do not meet the required ESG standards are screened out.  

Three of the four new mandates target a minimum of CPI plus total return, and the fourth has an income target of a net 3.5% per annum.

Richard Cook, Founder and CEO at Blackfinch, said: “We believe in addressing our target market with straightforward, clear and transparent investment propositions. The Adaptation Funds are targeted and streamlined in terms of their ratings, structure, reporting and availability. This offering reflects our dual focus on aligning with advisers’ processes and aims alongside clients’ financial objectives.” 

Blackfinch has £350m in assets under administration and management and partnerships with over 35 adviser firms.

BlackRock extends MyMap range with ESG fund

10 June 2020

BlackRock has extended its multi-asset indexing range MyMap with an ESG funds.

The group, which announced in January its commitment to make sustainability its “new standard” for investing, has launched the MyMap 5 Select ESG Fund, which it said was a low cost option for investors looking to meet their sustainable investing goals.

It will consider a broad range of investment themes including climate change, natural resources, pollution and waste, social opportunities and corporate behaviour.

Launched a year ago, the MyMap range was deigned to help investors achieve financial returns through cost-effective funds – the portfolios are built using BlackRock’s iShares ETFs and index funds. The funds are actively managed and rebalanced on a quarterly basis.

The MyMap 5 Select ESG Fund currently holds 33% in bonds, 64% in stocks and 3% in assets classed as ‘other’. It has a volatility target of 8-11% and carries an OCF of 0.17%.

Heather Christie, head of UK advisers and platforms at BlackRock, commented on the launch: “The covid-19 crisis has triggered a widespread reassessment of the way we live our lives in terms of our health, our finances, and everyday activity. For advisers and their clients this has resulted in identifying resilient sources of return as they increasingly seek to build portfolios that match their sustainable investing goals.

“Adding an ESG focused fund into the MyMap range, continues our commitment to providing choice and, means people can still benefit from being invested in a low-cost multi-asset index product but can now do so in a sustainable way.”

Calvert to manage Eaton Vance ESG strategies

9 June 2020

Eaton Vance Management has launched a series of equity strategies with its subsidiary Calvert Research and Management as the investment adviser.

Aimed at institutional and professional investors, the strategies will be co-managed by Calvert’s vice presidents and portfolio managers Jade Huang and Chris Madden.

The following strategies have been unveiled:

  • Calvert US ESG Leaders
  • Calvert Tax-Managed US ESG Leaders
  • Calvert Global ex.-US Developed Markets ESG Leaders
  • Calvert Tax-Managed Global ex-US Developed Markets ESG Leaders
  • Calvert Global Developed Markets ESG Leaders
  • Calvert Tax-Managed Global Developed Markets ESG Leaders
  • Calvert Emerging Markets ESG Leaders

Eaton Vance said the funds will invest in companies Calvert has identified as emerging leaders in ESG and have the potential to deliver long-term performance. The managers will engage with portfolio companies to ensure they are on top of managing material environmental and social exposures and governance processes, as well as enhancing investment returns.

The managers will draw upon quantitative and qualitative analysis to create a risk-managed portfolio, while seeking to effect positive change.  

John Streur, president and chief executive officer of Calvert, said: “Financial materiality is a critical component of ESG analysis. We believe understanding the connection between sustainability factors and business success sets these companies apart and positions them to maneuver efficiently and effectively in an evolving world.”

Eaton Vance has $465.3bn in assets under management, as at 30 April 2020.

Aviva Investors adds second climate transition fund

9 June 2020

Aviva Investors has launched the Climate Transition Global Equity Fund, managed by Jaime Ramos Martin.

It is the second vehicle the firm has brought to the UK market which supports the transition to a low carbon economy following the Climate Transition European Equity Fund, which launched last year.

The new fund will aim to outperform global equity markets. It will not invest in stocks exposed to coal, unconventional fossil fuels, Arctic oil and gas production or thermal coal electricity generation, and limits exposure to those producing oil and gas or gas-fired power generation.

Manager Ramos Martin will work closely with climate change specialist Rick Stathers, who has developed proprietary methodology for defining climate investment risk, and also draw upon the analysis of the 27-strong responsible investment team around the world and over 40 equities investment professionals.

David Cumming, CIO of equities, at Aviva Investors, said:  “Addressing climate-related risks is critical. It is an absolute requirement of asset managers and a key ESG focus for our investors. Since launching the Climate Transition European Equity Fund last year, we have seen tremendous interest from clients in the benefits of this type of investment-led solution. Through connected thinking across our investment teams and climate specialists, we expect our focus on this sector to give us an effective edge in our efforts to tackle climate change.”

Ninety One unveils South Africa recovery fund

9 June 2020

London and Johannesburg-listed asset manager Ninety One, which recently spun out from South Africa-rooted Investec, has launched a fund supporting South Africa’s recovery from the effects of the coronavirus pandemic

The protracted lockdown put in place to prevent the spread of covid-19 has been estimated to cause a 10% contraction in South Africa’s GDP, and the country is expected to experience the worse recession in living memory. Ninety One said if productive capacity is not preserved, the region will suffer an L-shaped recession, which would take a decade to recover from.

It added there are companies across SA that desperately need funding that cannot be provided by the banks or the state, limiting their ability to grow and expand, but also challenging their solvency and resolve to reman operational.

In conjunction with Ethos Private Equity, an alternative asset manager based in South Africa (SA), Ninety One has launched the SA Recovery Fund with the objective of having a positive impact, as well as attractive returns, by aiming to protect SA productive capacity over the next two years and protect permanent loss of equity value.

Hendrik du Toit, founder and CEO of Ninety One, said: “The lockdown, while necessary to protect the nation’s health, has been akin to putting the economy into an induced coma. South Africa faces a once-in-a-generation economic challenge.  The SA Recovery Fund is a market-led, impact initiative aimed at mitigating the negative economic impact of the covid-19 pandemic, while seeking a commercial return. With this fund, we would like to support quality businesses and protect the nation’s productive capacity, which will in turn preserve thousands of jobs and support the South African tax base.”

Stuart Mackenzie, chief executive of Ethos Private Equity, added: “The Ninety One SA Recovery Fund provides Ethos with a unique opportunity to partner with Ninety One on a critical funding initiative at an important moment for our nation.  Our experience and institutional capabilities in private equity ideally position us to play a value adding role in the execution of the Ninety One SA Recovery Fund’s investment strategy.”

It will consist of a concentrated portfolio with a mix of senior and subordinated debt, preferred equity, listed equity and private equity with a deployment time horizon of 18 to 36 months.

The groups are targeting a fund size of approximately $600m with funding raised via two closes, the first one in July 2020. It will be initially be opened up to institutional investors in SA before being brought to the retail market.

NN IP signs China partner for ESG A-Shares launch

1 June 2020

NN Investment Partners (NN IP) has launched an ESG-integrated China A-Shares fund, in conjunction with strategic partner China Asset Management Co (China AMC).

Registered for sale in Luxembourg and the Netherlands, the NN (L) International China A-Share Equity Fund  will invest in companies based in or with significant exposure to mainland China, listed on the the Shanghai Stock Exchange or the Shenzhen Stock Exchange.

It will be constructed using NN IP’s experience in responsible investing and China AMC’s research and security selection.

Twan Philipsen, head of partnership relations at NN IP, said: “We are proud to work together with ChinaAMC and to have launched a product that enables our clients to access the Chinese equity markets whilst at the same time retaining a high standard of ESG integration. At NN IP, Responsible Investing is at the core of our investment processes. We will continue to look for opportunities to expand our offering of responsible solutions in close collaboration with our partners.”

Richard Pan, head of global capital investment at ChinaAMC, added: “Local expertise and disciplined investment process can help global investors to navigate investment opportunities in the second largest equity market in the world. Our close collaboration with NN Investment Partners upgrades our joint ESG analysis in evaluating Chinese companies’ long-term sustainability and potential risks.”

BEIS and CCLA back Clean Growth fund

22 May 2020

The UK’s Department of Business, Energy & Industrial Strategy (BEIS) and charity fund manager CCLA have committed to be cornerstone investors of a recently launched fund focused on ‘clean growth’ companies.

The Clean Growth Fund will invest in early-stage companies based in the UK that are pioneering carbon emission reductions in the areas of power and energy, buildings, transport and waste.

It has secured £40 from BEIS and CCLA (£20m each) to invest in these companies which the manager Clean Growth Investment Management (CGIM) hope will lead to an acceleration in the development and commercialisation of clean growth technologies, create new and skilled jobs across the country, and contribute to the UK’s efforts to deliver net zero by 2050.

CGIM added its managing partner Beverley Gower-Jones is working in partnership with Northstar Ventures to harness in-depth knowledge of the UK low carbon technology sector.

Gower-Jones said: “The Clean Growth Fund is a significant boost to the country’s low carbon sector and is a clear signal from the UK Government that new and innovative technologies will be crucial to deliver Net Zero and the clean growth agenda. We want to hear from the very best clean technology businesses from across the UK.”

James Bevan, CCLA’s chief investment officer, added: “We decided that it was time for CCLA to invest in the very best early stage technologies to support the UK Net Zero objective.  In partnership with BEIS, we have developed a solution, the Clean Growth Fund.  Through the Clean Growth Fund, we now look forward to working with other investors to support these exciting young UK companies aiming to reduce carbon emissions.”

It is hoped the fund will raise £100m in assets under management.

UBP unveils positive impact EMs fund

14 May 2020

Union Bancaire Privée (UBP) has added to its impact range with the launch of the UBAM – Positive Impact Emerging Equity Fund.

The fund aims to generate a measurable social and environmental impact alongside a financial return by investing in emerging markets. It will hold 35-45 stocks across six themes linked to the UN Sustainable Development Goals (SDGs) focused on basic needs, health and well-being, inclusive and fair economies, healthy ecosystems, climate stability and sustainable communities.

Co-managed by Mathieu Nègre (head of emerging equities) and Eli Koen (emerging equities portfolio manager), UBP said the fund’s initial investments will include companies involved in renewable energy and energy storage, transport disruption, life/health insurance innovation and microfinance and emphasis will be placed on innovative companies that are looking to drive positive change.

Meanwhile, UBP has also enhanced its impact governance by establishing an Impact Advisory Board chaired by Anne Rotman de Picciotto, a member of UBP’s board of directors, and an Impact Investment Committee, chaired by Simon Pickard.

The Impact Advisory board will take thought leadership drawn from ESG external experts and embed it into the bank’s impact platform, while the Impact Investment Committee is in charge of developing the Bank’s impact investing capabilities, while also incorporating industry best practice.

Nicolas Faller, co-CEO of asset management at UBP, said: “In the midst of the ongoing public health crisis, which is having such devastating outcomes, the long-term importance of impact investing is now even clearer, since it is one of the ways we can address areas in which we are currently falling short of our social goals.

“This latest launch and the strong impact governance we now have in place underline our continued commitment to responsible investment. We believe that companies helping to solve the acute challenges faced by society and the planet are ideally positioned for steady growth over the coming decades.”

Jupiter opens Global Sustainable Equities fund to retail investors

5 May 2020

Jupiter has added a retail share class to its Global Sustainable Equities fund, run by fund manager and ESG Clarity editorial panellist Abbie Llewellyn-Waters.

The fund, previously only available to institutional investors, invests in companies that Jupiter describes as “high quality” and “leading the transition to a more sustainable world”.

It launched in April 2018 and holds around 35-50 companies with low carbon exposure that are listed globally across developed and emerging markets. The companies need to balances the need of three key Jupiter stakeholders: Planet, people and profit.

Llewellyn-Waters commented: “Sustainability is a long-term structural opportunity that has been hurtled to the fore in this tragic chapter we find ourselves in. To deliver a more regenerative form of capitalism, the market needs to broaden its focus across three core stakeholders: Planet, People, and Profit. We think companies that deliver positive outcomes across those core stakeholders are better positioned to both survive and ultimately thrive over the long term.

 “Transitioning to a more sustainable world is the key priority for our fund and against this unprecedented backdrop we are encouraged to have provided resilience for investors.”

Sitting in the Investment Association’s Global sector, the £32m Jupiter Global Sustainable fund has returned 5.1% over the past year to 1 May, compared to the peer group loss of 2%, according to FE.

Morgan Stanley launches climate impact fund

5 May 2020

Alternative Investment Partners Private Markets (AIP Private Markets), part of Morgan Stanley Investment Management, has launched a Global Climate Impact fund in order to address a number of climate issues.

The fund, launched in collaboration with the US congregations of Dominican Sisters, will focus on climate change and aiding marginalized communities that are disproportionately impacted by global warming. It will also seek opportunities in companies having a positive impact on pollution, depleting resources and eco diversity.

It adds $110m to the firm’s $800m impact investing platform.

Vikram Raju, head of impact investing at AIP Private Markets, said: “AIP Private Markets’ Impact Investing platform has enabled us to catalyse private sector capital to address some of the most critical challenges faced by the planet and people in need. Every dollar invested in our climate program will seek to have a concrete climate impact measurement ranging from tonnes of CO2 emission offset and litres of water saved, to reduction in air pollution levels, in addition to generating compelling private markets returns.”

iShares adds three ESG factor ETFs

22 April

BlackRock’s iShares has added three ESG factor ETFs to its range, as it anticipates assets in sustainable ETFs will double to $1.2trn over the next decade.

The group has unveiled the three minimum volatility strategies as its continues in its commitment to make sustainability its standard for investing, as announced in January this year.

The three new products are:

  • iShares EDGE MSCI World Minimum Volatility ESG UCITS ETF (MVEW): This fund provides diversified exposure to a broad range of developed world companies with international market exposure and lower volatility characteristics. It carries a TER of 0.30% and is the ESG alternative to the iShares EDGE MSCI World Minimum Volatility UCITS ETF (MVOL).
  • iShares EDGE MSCI Europe Minimum Volatility ESG UCITS ETF (MVEE): An ESG alternative to the iShares EDGE MSCI Europe Minimum Volatility UCITS ETF (MVEU), the fund focuses on diversified exposure to European companies with lower volatility characteristics and carries a TER of 0.25%.
  • iShares EDGE MSCI USA Minimum Volatility ESG UCITS ETF (MVEA): provides diversified exposure to U.S companies with lower volatility characteristics relative to the broader U.S equity market. The fund carries a TER of 0.20% and is the ESG alternative to the iShares Edge S&P 500 Minimum Volatility UCITS ETF (SPMV).

The group added inflows into global sustainable ETFs alone totaled $14.8bn in the Q1 of 2020, more than three times the Q1 2019 figure, and forecast assets will grow by $1trn to $1.2trn over the next decade.

Philipp Hildebrand, vice chairman at BlackRock, said: “The seismic reallocation of assets into sustainable investment strategies is underway and will only accelerate from here. The resilience of sustainable strategy returns amid the ongoing market turmoil, in delivering better portfolio outcomes, is notable and will further fuel demand for sustainable building blocks. Indexed products are enabling large scale integration of sustainable criteria into the portfolios of wealth managers and institutions across the globe, and this is only the start.”

T. Rowe Price launches ESG versions of five core strategies

21 April

T. Rowe Price has launched five sustainable SICAVs to European clients mirroring existing core portfolios at the group.

The fund will apply an exclusion overlay to the existing strategies, screening out positions where there are ESG concerns as expressed by the firm’s clients.

The new fund range comprises of:

  • T. Rowe Price Sustainable Global Focused Growth Equity Fund
  • T. Rowe Price Sustainable Global Growth Equity Fund
  • T. Rowe Price Sustainable US Large Cap Growth Equity Fund
  • T. Rowe Price Sustainable Asia ex-Japan Equity Fund
  • T. Rowe Price Sustainable Emerging Markets Equity Fund

The group added ESG analysis is already embedded into the investment process across the firm’s range and the investment team actively engage with companies on ESG issues, as well as utilising utilise T. Rowe Price’s proprietary Responsible Investing Indicator Model (RIIM) to further integrate ESG considerations into fundamental research and investment decisions.

Maria Elena Drew, director of research, responsible investing at T. Rowe Price, said: “These funds will incorporate the ESG research capabilities that are already integrated across the firm’s research platform, as well as safeguard that certain types of securities will not be held in the portfolio.

“The new funds range offers clients access to portfolios that exclude specific companies whose business activities involve controversial weapons, assault-style weapons for civilian use, the production of tobacco, the production of thermal coal and adult entertainment.

“In addition to this, T. Rowe Price’s actively monitored conduct-based component of the exclusion list ensures the avoidance of investing in companies that have had an extreme environmental, social, ethical or governance breach and are not taking credible steps to remediate the issue.”

BlackRock unveils Global Impact fund

16 April 2020

BlackRock has built on its commitment to make sustainability its “new standard for investing” with the launch of a Global Impact fund.

Managed by the active equities impact investing team, the fund will invest in companies that are contributing to the advancement of the UN’s Sustainable Development Goals (SDGs) by addressing the world’s major ESG challenges. Themes include increasing access to quality education and affordable housing, advancing healthcare innovation to help with societal challenges such as the current covid-19 pandemic, expanding financial and digital inclusion, preventing climate change, reversing environmental degradation, and increasing efficiencies in water usage and deployment.

It will seek to outperform the MSCI All Country World Index while also complying to the below impact criteria:

– materiality – whereby a majority of revenues or business activity advances one or more of the SDGs or targets;

– additionality – defined as delivering a new technology or innovation to market, serving an underserved population, or operating in an unaddressed market; and

– measurability – in that the impact must be quantifiable.

The fund also uses the World Bank’s IFC Operating Principles to ensure impact considerations are integrated throughout the investment lifecycle.

Eric Rice, head of active equities impact investing at BlackRock and portfolio manager of the Global Impact Fund, said: “Impact investing is becoming more and more attractive as investors increasingly require their investment targets to advance their sustainability objectives.

“Launching the fund during the covid-19 pandemic has further highlighted the important role companies play in society. 

“Covid-19 is one of the greatest societal challenges the world faces right now, and we see impact investing playing a meaningful role in how we overcome it. Capital from the fund will be put toward the search for alpha by investing in companies focused on medical diagnostic tools and vaccines to combat the crisis, as well as crisis mass notification systems and microloans, amongst others.”

The BlackRock Global Impact Fund is US dollar-denominated and available for investors located across Europe. 

It sits in BlackRock’s sustainable investing platform which manages around $107bn, as at 31 December 2019.

In January, surprised the investment world by announcing it will overhaul its current strategy and bring in a raft of new changes to drive ESG integration across its investment processes, declaring it will make sustainability its “new standard” for investing following growing criticism over its failure to address climate-related risks.

Lyxor unveils suite of climate change ETFs

27 March 2020

Lyxor ETF has launched a suite of ETFs for the European market, which aim to tackle climate change.

The range includes European, US, Emerging Markets and World equity exposures and are designed to be consistent with the carbon emission reduction targets of the Paris Agreement of 2015.

The Emerging Markets and US ETFs were listed today on Euronext (in euro) on 26 March and they’ll also be listed on London Stock Exchange (in US dollar) on 7 April. Two further ETFs will follow shortly, the group said.

Tracking MSCI’s Climate Change indices, the products take into consideration the main objectives of the European Union’s regulations on investment benchmarks as part of the EU Action Plan on Financing Sustainable Growth of 2018. Lyxor highlighted most major investment benchmarks currently imply temperature rises of around 4°-6°C between now and 2100, which could mean the end of humankind as we know it, so shifting the trillions away from these non-compliant indices is extremely important.

Arnaud Llinas, head of Lyxor ETF & Indexing, said: “By revising its investment benchmark regulations, the EU has assigned passive, rules-based investment managers a key role in the fight against climate change. ETF providers have the opportunity, and indeed the responsibility, to help shift the trillions by offering simple, transparent products which meet the requirements of the new regulation.

“Through the addition of this range, we are providing investors with yet more tools to achieve their climate goals.”

The Lyxor MSCI USA Climate Change UCITS ETF and Lyxor MSCI EM Climate Change UCITS ETF carry a TER of 0.25% and 0.3% respectively.

BlackRock adds Ultrashort ESG bond range

18 March 2020

BlackRock has widened its ESG ETF range in the form of an Ultrashort bond suite.

The group, which recently committed to making “sustainability its standard” and launching ESG mirrors to its standard range of funds, has launched three iShares UCITS ETFs offering US dollar, euro and sterling exposure to very short duration investment grade bonds across industrials, utilities and financial companies.

The three funds are:

  • iShares USD Ultrashort Bond ESG UCITS ETF (UEDD): tracks the Markit iBoxx ESG USD Liquid Investment Grade Ultrashort index and carries a TER of 0.09%.
  • iShares EUR Ultrashort Bond ESG UCITS ETF (EUED): tracks the Markit iBoxx ESG EUR Liquid Investment grade Ultrashort index and carries a TER of 0.09%
  • iShares GBP Ultrashort Bond ESG UCITS ETF (UESD): tracks the Markit iBoxx ESG GBP Liquid Investment Grade Ultrashort index and carries a TER of 0.09%.

Applying the ESG criteria means the ETFs exclude exposure to excludes issuers involved in controversial weapons, nuclear weapons, conventional weapons, civilian firearms, tobacco, adult entertainment, alcohol, gambling, nuclear power, genetically modified organisms, oil sands and thermal coal.

Brett Olson, head of fixed income iShares EMEA at BlackRock, said, “Investors are turning to ETFs to access markets and make portfolio allocations quickly and cost-effectively amid market uncertainty, and the trend towards sustainability is weathering the turbulence. The global sustainable ETF industry has attracted $14.3bn since the start of the year, and we remain committed to providing investors with the choice of investment tools to build resilient portfolios and meet sustainability goals.”

Lombard Odier IM unveils Climate Transition strategy

17 March 2020

Lombard Odier Investment Managers has expanded sustainable equities range by adding a Climate Transition strategy investing in companies helping the transition towards  a net-zero economy.

Run by portfolio managers Paul Udall and François Meunier will select 40-50 global equity stocks from across a multitude of sectors.

Companies will typically be solution providers, transition candidates from hard-to-abate sectors, and adaptation leaders that have strategies to reduce, avoid and capture carbon, but also general growth and build market share.

Hubert Keller, managing partner of Lombard Odier Group and CEO of LOIM said:“We are in the midst of a massive wholesale transformation towards a sustainable net-zero economy. Investors have trillions at stake in this climate transition, which we believe will create significant value and fundamentally shape portfolio outcomes in the years to come.

“LOIM’s Climate Transition strategy has been designed as a mainstream global building block for asset allocation. It represents one of several important steps we are taking across the firm to align all portfolios and capture the investment opportunities arising from climate transition.”

LOIM said it will also publish a sustainability report to show the positive climate these companies are bringing to society and the planet and to report on stewardship progress across the portfolio.

Boundary adds impact EIS fund

12 March 2020

Venture capital firm Boundary Capital has launched the Impact Life fund to invest in disruptive technology companies that will positively impact at least 100 million human lives.

The EIS fund, aimed at private investors, has been designed with the purpose in mind to “enrich people’s lives” according to the group. Boundary has developed a proprietary methodology measuring the lives impacted over a long-term period, and explores investment themse that support the UN’s Sustainable Development Goals (SDGs).

It will target B2B technology business predominately based in life sciences, engineering and IT industries that enable scalable impact. For example, in wound care technology that reduces many patients’ care needs rather than investing in care homes.

Dan Somers, managing partner at Boundary Capital, commented: “Impact investment has mostly been socially-driven up until now. Now there is the opportunity for investors to make a return as well as optimising the impact that their investments can make on human lives.”

AllianceBernstein unveils four equity funds with ESG overlay

12 March 2020

Global investment firm AllianceBernstein has launched four OEICS in the UK mirroring offshore strategies.

The four funds, including the Concentrated Global equity, Concentrated US equity, Low Volatility Global equity and the Sustainable US equity, take an active, bottom-up stock selection approach and evaluate the ESG criteria of each company.

Jamie Hammond, CEO of AllianceBernstein, EMEA, said, “We are seeing tremendous demand in the UK for both concentrated equity portfolios and sustainable strategies. In keeping with our growth strategy of making relevant active products available to UK investors, we have decided to launch these products in our recently established OEIC umbrella.

“We believe these new funds will offer investors a differentiated approach in popular sectors, such as concentrated global equity portfolios, which have proven to be very popular with ISA investors over the recent years.”

This is rolling stream of the latest fund launches in the ESG, responsible and sustainable sector.

Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021. Winner of Aegon Asset Management's Institutional Journalist of...