ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including M&G, BlackRock, Mirova, BNPP AM, ABN AMRO, Vontobel, Engine No.1.
Responding to the ongoing economic and social impact of the Covid-19 pandemic, asset managers are bolstering their exposure to healthcare and wellbeing corporates. M&G Investments has launched the M&G Better Health Solutions Fund, an equity strategy that will invest in companies with products and services designed to promote better health and wellbeing, while maintaining strong investment returns. The fund portfolio will consist of between 30-35 holdings, and M&G has committed to reporting annually on each company’s contribution to the United Nations Sustainable Development Goals. “The global pandemic has not only put the strains on healthcare systems in both developed and developing economies into stark focus but it has also demonstrated the importance lifestyle and mental well-being can have in preventing ill health. There is a growing demand for health and well-being services worldwide and many companies are seeking to provide solutions, which will allow many of us to lead better and healthier lives,” said Jasveet Brar, Fund Manager at M&G Investments. The world’s largest asset manager BlackRock has also expanded its thematic equities range with two active funds targeting healthcare and wellbeing. The BGF Next Generation Health Care Fund offers cross-regional exposure to next generation health companies that are expected to drive growth and innovation through solutions to some of the most pressing healthcare challenges. New trends include genetic medicine, immunotherapy, robotic-assisted surgery and medical AI applications. The BGF Future Consumer Fund will invest in businesses driving the transformation of the consumer ecosystem, such as personal wellbeing development. The fund falls under Article 8 of the EU’s Sustainable Finance Disclosure Regulation. Both funds incorporate BlackRock’s ESG and sustainability criteria, aiming to outperform the MSCI All Country World Index (ACWI). “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,” said Evy Hambro, Global Head of Thematic and Sector-based Investing at BlackRock.
Engine No.1, an investment firm that aims to create long-term value by driving positive impact through active ownership, is launching its inaugural Engine No.1 Transform 500 ETF (VOTE). The fund has an initial investor commitment of US$100 million, with independent digital investment advisor Betterment integrating VOTE into all of its socially responsible investing strategies. VOTE will track the Morningstar US Large Cap Select Index. Rather than excluding companies with poor ESG-related performance, VOTE will seek to improve companies’ environmental and social impacts through active engagement. “The problem isn’t passive investing, it’s passive ownership. Too many sustainable investing strategies shift an investor’s exposure away from companies that need to change rather than working to change them. We see an opportunity to harness the power of investors in a new way,” said Michael O’Leary, Managing Director of Engine No.1.
Mirova, an affiliate of Natixis Investment Management, has partnered with the International Union for Conservation of Nature (IUCN), Turneffe Atoll Sustainability Association (TASA), Blue Finance and the Ministry of Blue Economy of Belize to launch an innovative blended finance facility. The US$1.2 million blended finance facility is structured and funded by Mirova through the Althelia Sustainable Ocean Fund, supported by Mirova’s aforementioned partners. It will enable TASA to implement a number of sustainable revenue-generating initiatives, protecting 132,000 hectares of coral reef ecosystems. The investment will further be used to improve the management of mangrove and sea grass habits and fisheries, while bolstering the local economy. This will also contribute directly to a number of the UN’s SDGs: 1, 13, 14 and 17 (no poverty, climate action, life below water, and partnerships). “Where real effective protection of the ocean is today still only at about 3%, TASA is a great example of the type of initiatives the Sustainable Ocean Fund is seeking to support, and where there is significant potential to scale environmental and social impacts for marine protection, in lockstep with a sustainable long term business model,” said Simon Dent, Head of Blue Investment at Mirova Natural Capital.
BNP Paribas Asset Management (BNPP AM) has launched the BNP Paribas Multi-Asset Thematic fund, which will invest across BNPP AM’s range of thematic strategies. Through flexible multi-asset allocation, the fund will capitalise on a combination of three key themes that offer long term investment opportunities: sustainability; innovation and disruptive technology; and geopolitics and economics. The fund will be managed within BNPP AM’s Multi-Asset, Quantitative and Solutions (MAQS) investment group. “The fund is part of a new generation of thematic investment solutions, investing in equities as well as in a more innovative way in fixed income, and is exposed to the major structural trends of a globalised economy which are expected to shape the market in the future. It is expected to be of interest to savers as a first introduction to thematic investing,” said Denis Panel, Head of BNPP AM MAQS.
Vontobel has expanded its suite of thematic funds with the launch of the Vontobel Fund II – 3-Alpha Megatrends. The fund offers access to multiple growing and disruptive technology companies across a range of themes, such as smart farming and food technology, E-Sports and gaming, cloud computing and more. “With new technologies transforming entire industries, investors need to think about how to position their portfolios accordingly in the future. We believe these transformations will bring new opportunities, which are best captured by actively investing in structural growth themes and selecting companies with the scope to grow multiples of their current size,” said Daniel Maier, Vontobel’s Head of Thematic investing.
Dutch bank ABN AMRO has launched a €425 million fund for sustainable impact companies. The Sustainable Impact Fund (SIF) will invest in companies that are accelerating the transition towards a sustainable and inclusive society. Investments will range from private equity to venture capital, targeting the circular economy, the energy transition and social impact. The fund made its first two venture capital investments last month. Envision is a Dutch company developing software for ‘smartglasses’, which incorporates AI technology to translate images and written text into sound as an aid to the visually impaired. Foodlogica transports refrigerated food in densely populated cities using sustainable vehicles. “Our bank finances countless sustainable initiatives, in the form of loans and credit. However, in some situations, companies need equity investments. Our new fund is able to offer this as a solution. Companies that link sustainable returns to a strong business plan can apply to ABN AMRO SIF,” said Rutger van Nouhuijs, a member of ABN AMRO’s executive committee.
