Fund Solutions

This Week’s Fund News: HSBC AM Targets Circular Economy, Exits Coal

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including HSBC AM, Invesco, BlackRock, Franklin Templeton, Janus Henderson and Mirova. 

HSBC Asset Management (HSBC AM) has launched the HGIF Global Equity Circular Economy Fund, which will invest in up to 60 companies that are enabling the transition to a circular global economy. Viable companies will include those “designing out” waste and pollution, regenerating natural systems and keeping products and materials in use. The fund, which is labelled as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR), will have no fixed allocations across geographies, sub-subsectors or company stages, targeting wholesale and institutional investors with a “particular focus on high-net-worth individuals, family offices and private banks”. It follows the launch of three ESG-focused funds earlier this year, including two Paris-aligned UCITS ETFs for emerging markets and Asia-Pacific ex-Japan, and an Asia ESG Bond fund. HSBC AM’s Head of Climate Equity, and Francois Travaille. Erin Leonard, HSBC AM’s Head of Sustainability, said: “We need for businesses to be smarter in their production and consumption models. This fund will support companies that are leading the way in this incredibly important area of innovation.” HSBC AM also announced it will be phasing out coal-fired power and thermal coal mining from its listed holdings. The firm said it will actively work with company boards to support the transition away from thermal coal in EU and OECD markets by 2030, and globally by 2040. Companies that fail to show credible plans to transition away from thermal coal within this timeframe will lose the support of the company.  

Invesco, a US-based investment manager, has launched new wind energy and hydrogen economy ETFs, the Invesco Wind Energy UCITS ETF and Invesco Hydrogen Economy UCITS ETF. The ETFs aim to meet the growth in demand for thematic clean energy funds that offer targeted exposure to clean energy solutions. The Wind Energy UCITS ETF will track the WilderHill Wind Energy Index, which is composed of global companies focused on improving wind turbines and blades, providing materials used in wind energy, modernising the grid, facilitating greater wind energy deployment or expanding its use. The Hydrogen Economy UCITS ETF will track the WilderHill Hydrogen Economy Index, investing in companies targeting hydrogen generation, storage, conversion, transportation, and advancement of fuel cells. The ETF will maximise exposure to green hydrogen-related investment opportunities. Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco, said: “Almost half of European ETF flows this year have been into products with an ESG classification, and 40% of those assets were into funds with climate objectives or thematic exposures such as clean energy. We selected these WilderHill indices as they offer our ETF investors access to one of the most experienced firms in clean energy index solutions.”  

BlackRock Real Assets has acquired New Zealand solar energy services company solarZero. As part of the acquisition, it intends to commit over NZ$100 million over the next three years to accelerate the growth of solarZero’s solar and battery technology platform. Launched in 2008, solarZero is a roof-top solar and smart battery provider aiming to make solar and low-priced energy more accessible. Since its launch, solarZero has installed 8,500 solar systems on New Zealand residential, commercial, and community buildings. The company is the first residential solar and battery investment made by BlackRock’s Climate Infrastructure business in the Asia-Pacific (APAC) region, and will boost New Zealand’s targets to for 100% renewable electricity generation by 2035 and a carbon-neutral economy by 2050. Charlie Reid, BlackRock’s APAC Co-Head of Climate Infrastructure, said: “New Zealand is widely recognised as a global leader in renewable energy and climate finance, and we are pleased to make our first investment in this market. solarZero is a global pioneer, and we look forward to supporting its expansion into other Asia-Pacific markets and, at the same time, to accelerating New Zealand’s net zero journey.”  

US investment manager Franklin Templeton has unveiled a new social-focused bond fund. The Franklin European Social Leaders Bond Fund, which is labelled as Article 9 under SFDR, aims to deliver positive social outcomes by promoting social equality while delivering strong financial returns. It will primarily invest in euro-denominated investment grade bonds, targeting entities involved in socially sustainable activities, including those outlined in the UN Sustainable Development Goals (SDGs). David Zahn, Franklin Templeton’s Head of European Fixed Income, said: “Europe is the largest and most advanced social bond market globally and continues to experience rapid growth. This strategy will give investors access to a wide range of attractive social bonds and the opportunity to support investments geared towards creating societal benefits.”  

Janus Henderson, a British-American global asset management group, has launched a US Sustainable Equity Fund for UK investors. The Janus Henderson US Sustainable Equity Fund OEIC will look to provide long-term capital growth for investors through investments in US companies with products and services that are contributing to positive environmental or social change. Hamish Chamberlayne, Janus Henderson’s Head of Global Sustainable Equities, said: “Our new fund will build on Janus Henderson’s existing strengths: the sustainability credentials that the Global Sustainable Equity Fund has built over decades, as well as the company’s strong existing distribution network in the UK.”  

Mirova, an affiliate of France-based Natixis Investment Managers, has raised €1.6 billion for its fifth energy transition equity fund, the Mirova Energy Transition 5 (MET 5). The fundraising round lasted 18 months, and is the firm’s largest up to this point. MET 5 has invested €600 million across France, Poland and Belgium, targeting technologies such as onshore wind power, solar PV, hydroelectricity, and energy storage. It has also invested in low-carbon mobility sectors, supporting the growth of the electric vehicle sector and the emergence of green hydrogen. Up to 10% of MET 5’s funds may be invested outside of Europe, targeting projects located in OECD member countries as well as Asia. Raphaël Lance, Director of Mirova’s energy transition infrastructure funds, said: “This fundraising demonstrates investors’ confidence in our responsible investment strategy, which puts impact at the heart of its activity. MET 5 also marks our ability to raise funds internationally.”  

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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