ESG Investor’s weekly round-up of news on funds designed to meet sustainable investing criteria.
A new range of sustainable index funds have been launched by Aberdeen Standard Investments, aimed at pension funds and institutional investors, utilising a tax-efficient Authorised Contractual Scheme structure. The ASI Sustainable Index World Equity Fund and the ASI Sustainable Index UK Equity Fund both launch this month, with the ASI Sustainable Index Emerging markets Equity Fund launching Q1 2021. Each of the index funds track customised MSCI sustainable equity indices to provide materially improved, broad-based sustainability outcomes. Additionally, they target sustainability outcomes by enhancing aggregate ESG scores, improving green revenues, and reducing carbon intensity. “The launch of our sustainable indexation range is a natural extension of our market-leading indexing capability,” said Caroline Silander, head of equity indexation at Aberdeen Standard Investments.
Three new equity strategies have been introduced by Allianz Global Investors, designed to foster investment in positive change in alignment with the UN Sustainable Development Goals (SDGs). The Allianz Positive Change, Allianz Clean Planet and Allianz Food Security funds will be managed through AllianzGI’s thematic approach, which assesses ESG-related themes such as energy transition, social inclusion and circular economy. Specific outcomes targeted by one or more of the SDGs are identified select companies contributing to the targets, allowing investors to tap into specific, tangible themes and underlying topics. “This is an attractive market for investors as it provides new business opportunities, new solutions and the related dynamics. We are consequently looking for long-term winners with strong growth potential and resilient business models,” said Andreas Fruschki, head of thematic investing at AllianzGI.
Fidelity International has launched three Luxembourg-domiciled regionally focused portfolios: Fidelity Funds – Sustainable Asia Equity Fund, Fidelity Funds – Sustainable European Smaller Companies Fund and the Fidelity Funds – Sustainable Japan Equity Fund. Forming part of the Fidelity Sustainable family, the funds’ investment approach is underpinned by three pillars, centred around engagement, exclusion and proprietary research. Combined with Fidelity’s focus on active engagement with an enhanced exclusion framework, the funds aim to ensure investee companies meet certain sustainable standards and perform in line with responsible investment values. The launch is expected to be followed by a further expansion of the Fidelity Sustainable Fund family in early 2021.
A new M&G Investments equity impact fund will invest in companies that provide solutions to the challenge of climate change whilst delivering attractive investment returns. Consisting a concentrated portfolio of around 30 firms, the M&G Climate Solutions Fund follows the same investment approach and process as M&G’s Positive Impact Strategy, assessing “pioneers, enablers and leaders” for inclusion. The fund also assesses in relation to climate-related UN SDG’s, alongside ESG related measures. “This fund provides our customers with the opportunity to address the climate emergency while putting their savings to work with a purpose,” said Ben Constable-Maxwell, head of sustainable and impact investing at M&G Investments.
Lombard Odier is launching a Natural Capital Strategy, designed to facilitate and improve opportunities for investors to connect with sustainable investing solutions. Developed in partnership with the Circular Bioeconomy Alliance, and inspired by the HRH the Prince of Wales, the Natural Capital Strategy is a global investment strategy which aims to drive transformational change to a climate and nature positive economy. The portfolio of 40-50 companies focuses on innovation and identifies companies well positioned to take advantage of four growth opportunities: a circular bio-economy; resource efficiency; outcome-orientated consumption; and zero waste. “Today some of the most convincing returns opportunities lie in the transition to a more sustainable economic model, putting climate transition and nature centre stage,” said Hubert Keller, managing partner of Lombard Odier Group.
Singapore-based Maitri Asset Management has launched its Sustainable Liquid Income Fund (S.LIQ), investing in US$-denominated bonds issued by corporates and sovereigns from across the globe. The fund aims to generate alpha over bank deposit rates by taking on liquid credit risk and incorporating a daily redemption feature. S.LIQ will also be able to invest in high-yield securities, and incorporates an ESG integrated framework. “The S.LIQ is testament to our belief in integrating ESG considerations into all our investment decisions and demonstrates that robust returns can be delivered responsibly and sustainably,” said CEO Manish Tibrewal.
Changebridge Capital has launched its first ETFs, the Changebridge Capital Long/Short Equity ETF (CBLS), and the Changebridge Capital Sustainable Equity ETF (CBSE). Both seek to harness quantitative and fundamental analysis for selecting inefficiently priced securities. CBLS features a concentrated portfolio of long and short positions, whilst CBSE utilises a long-only approach in its concentrated portfolio. CBSE is designed with a sustainability mandate, assessing the ESG attributes of all securities considered; CBLS seeks to achieve long-term capital appreciation with minimal volatility, integrating an ESG mindset into the investment process.