February 26, 2019 / News

M&G rolls out sustainable multi-asset fund

By Kristen McGachey, Portfolio Adviser

Fund will use an exclusionary ESG process and invest up to 20% in impact assets

M&G rolls out sustainable multi-asset fund

M&G Investments has launched a UK domiciled version of its sustainable multi-asset fund that integrates ESG factors and impact investing.

The M&G Sustainable Allocation fund will be managed by Maria Municchi (pictured) with support from deputy manager Steven Andrew.

The fund will use dynamic asset allocation and an assessment of behavioural factors to identify attractive assets globally, targeting a total return between 4% and 8% per annum over any five-year period.

It can hold between 20% and 80% in fixed income, 20% to 60% in equities and 0% and 20% in other assets.

The fund will also incorporate a negative ESG screening process, with Municchi screening out companies that are in breach of the United Nations Global Compact Principles and that derive their revenue from sectors like tobacco, alcohol, coal and weapons.

It will also hold up to 20% of the portfolio in ‘impact assets’ or companies that have been identified as having a positive impact on society with a focus on the United Nations Sustainable Development Goals.

Municchi will work closely with M&G’s Positive Impact team, which she is a member of, to build up a potential watch list of impact investments from equities to green and social bonds, as well as infrastructure.

Municchi said: “Financial returns should remain the foremost objective of investing, but the way in which we choose to invest can make a difference beyond just those returns. Some of the biggest challenges the world is facing, from climate change to population growth, from corruption to pollution, need addressing urgently.

“By considering how your investments might affect society and the environment, you can choose to contribute towards a sustainable future.”

This story first appeared on ESG Clarity‘s sister title Portfolio Adviser.