Fund Solutions

This Week’s Fund News: Aviva Investors Launches Climate Transition Fund

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Morgan Stanley, BlueBay, Schroders, Lombard Odier and Mirabaud. 

Aviva Investors has expanded its climate transition range with the launch of its Climate Transition Global Credit Fund. Aligned with the UN’s Sustainable Development Goals, the fund will invest in companies offering goods and services that mitigate climate risk and are aiding the transition to a low-carbon economy. It will exclude fossil fuel companies and only target companies offering climate solutions, such as renewable energy and sustainable transport, or transition-oriented companies that present low physical impact risk. The fund has been launched with a US$350 million strategic capital allocation from the asset management firm’s multi-asset range and the Aviva Ireland multi-asset portfolio. This follows Aviva’s pledge to reach net-zero carbon emissions by 2040. “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,” said Colin Purdie, CIO for Credit at Aviva Investors.

Morgan Stanley Investment Management (MSIM) has launched Global Insight Fund, an open-ended investment company (OEIC) which will invest in companies with sustainable advantages. Employing a bottom-up stock selection process, the fund will seek out investments on an individual company basis across sectors and geographies. It will be managed by MSIM’s Counterpoint Global. The fund is the second Counterpoint Global OEIC fund MSIM has launched, following the US Advantage OEIC in 2016. “Global Insight aims to offer UK investors the long-term growth that has underpinned the strong success across our Counterpoint Global strategies. Our goal is to generate long-term capital growth through our investments in unique and established high quality companies with sustainable advantages and whose market value have the potential to increase significantly over time due to their strong underlying fundamentals,” said Dennis Lynch, Head of Counterpoint Global at MSIM.

BlueBay Asset Management has launched the BlueBay Impact-Aligned Bond Fund, enabling fixed income investors to allocate for positive impact through investing in liquid public debt markets. The fund will invest in issuers making a positive social and environmental impacts while simultaneously delivering strong returns. Categorised as an Article 9 fund under the EU’s Sustainable Finance Disclosure Regulation, the sustainability-themed UCITS fund prioritises companies in which the core objective is to address global environmental and social challenges. Impact wealth manager Tribe Impact Capital has invested in the fund at launch. “Ultimately, we’re focused on finding companies that provide solutions to our sustainability themes whilst offering attractive valuations, and this flexible approach to investing allows us to do just that,” said Tom Moulds, Partner and Senior Portfolio Manager at BlueBay.

Schroders has surpassed €700 million in fundraising for its Schroder Euro Enhanced Infrastructure Debt Fund II (Julie II). Originally launched in Q3 2020, it has a hard cap target of €1 billion and is managed by the group’s specialist infrastructure team Schroder Asia. So far, the fund has invested in over 75 transactions in European infrastructure companies, focusing on the energy transition and digital infrastructure. Future investment opportunities will be explored across sectors such as water, railways, renewable energy portfolios and electricity grids. “The high demand we have seen for the fund is also further evidence to support our investment philosophy that there are many attractive investment opportunities in the sub-investment grade infrastructure debt space. Now, perhaps more than ever before, investing in infrastructure is key to supporting the world’s growing population and boosting economies,” said Augustin Segard, Schroders’ Head of Enhanced Infrastructure Debt.

Lombard Odier Investment Managers has launched four ‘TargetNetZero’ strategies across fixed income and equities, both global and European. The strategies all aim to decarbonise portfolios and accelerate the transition to a sustainable economy in line with the 1.5°C objective of the Paris Agreement. For equities, the TargetNetZero Global Equity and TargetNetZero European Equities strategies tilt the MSCI World and MSCI Europe indices towards companies in climate-relevant sectors aligning with the Paris Agreement. The TargetNetZero Global Investment Grade Credit and TargetNetZero Euro Investment Grade Credit strategies are high tracking-error credit strategies and have a low turnover approach. As well as comparing company carbon footprints, the strategy takes emissions trajectories into account all three scopes, as well as the company’s exposure to regulatory, internal and industry pressure that will aid a faster transition to a low-carbon economy.

Mirabaud Asset Management has been granted an SRI label in France for its Convertible Bonds Europe Fund. ESG materiality is a key component of the fund’s investment approach. Mirabaud’s Sustainable Convertibles Global, and two Global Equity strategies have been awarded the label. The SRI label was created by the French Ministry of Finance, awarded to strategies demonstrating ESG analysis in investments. “Attaining this label reflects our continuous commitment across our product range to Responsible Investment and our ongoing efforts to strengthen Mirabaud Asset Management’s positioning in terms of sustainability and responsibility,” Hamid Amoura, Mirabaud’s Head of Responsible Investment.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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