PGIM Investments has added an actively-managed ESG equity strategy to its UCITS platform, which negatively screens stocks deemed to be “the worst ESG offenders”.
The PGIM QMA Global Core Equity ESG Fund assesses the credentials of each security in its universe against a defined set of ESG metrics, which allows the group to substitute stocks which score badly on ESG for others with a better score. As the name suggests, the fund is sub-advised by factor investment specialist QMA.
“Our proprietary way of looking at data allows QMA to integrate ESG factors into portfolios aiming for performance comparable to non-ESG holdings,” QMA chairman and chief executive officer, Andrew Dyson said in a media statement.
“This process—which also solves for the industry-wide challenge of data sparsity when investing in ESG—is built around our time-tested core investment strategy that identifies alpha opportunities using value, growth and quality factors.”
QMA’s approach is informed by its recent research into sustainable investing, which was documented in a paper published earlier this year. The full findings are available here.
PGIM Investments’ president and chief executive officer said that he hoped that combining the talents and techniques of QMA and PGIM would “serve a significant need for ESG products from global clients.”
PGIM is the global brand of US investment group Prudential Financial and manages some $1 trillion in assets.
The company’s UCITS platform has 28 funds in total, across fixed income, equity and real estate. As at the end of September, the platform had around $3.1 billion in assets under management.