Fund Solutions

This Week’s Fund News: LGIM, Amundi, Fidelity, Aviva and More

ESG Investor’s weekly round-up of news on funds designed to meet sustainable investing criteria. 

Swedish pension fund AP1 and UK asset manager Legal & General Investment Management (LGIM) have launched an emerging markets equity fund to serve investor demand for index-linked funds with an extended sustainability profile. The L&G Emerging Market Equity Future Core fund will link capital allocation to clear sustainability requirements for companies included within the fund portfolio. Fund allocation will be based on an index, with exposure to each company based on its performance against sustainability criteria. The fund’s active ownership aspect combines a transparent sustainability rating for companies with LGIM’s active corporate governance work, both of which allow for close dialogue with companies and effective and actionable index tracking.

French asset manager Amundi is developing a low-carbon ESG index fund open to charities and endowment funds in collaboration with Clare College, University of Cambridge and Corpus Christi College, University of Oxford. The Amundi ESG Global Low Carbon Fund is a cost-effective index tracker, offering an improved sustainability profile to address financial risk in relation to climate change. Seeking to replicate the performance of the MSCI ACWI Index, the funds strategy removes all fossil fuel-related industries from the portfolio, reduces exposure risk to controversies and aims to improve green revenues and reduce carbon emission intensity. “The strategy we have developed together offers UK endowments, charities and professional investors a simple and cost-effective approach to reduce climate exposure in their portfolios over the long term,” said Ashley Fagan, head of ETF, indexing & smart beta strategy & business development for UK & Ireland at Amundi.

The Fidelity Sustainable Research Enhanced Market Equity ETF has been launched by Fidelity International in an expansion of its Sustainable Research Enhanced ETF range. Employing a systematic active strategy and Fidelity’s proprietary analyst research, companies are selected for inclusion based on their positive fundamental outlook and strong sustainability credentials, using Fidelity’s Sustainable Ratings. Fidelity’s Sustainable Research Enhanced Equity ETF range, launched in June 2020, forms part of Fidelity’s Sustainable Family range of funds. Our new Sustainable Research Enhanced ETF range offers investors a cost-effective and differentiated product aligned to their growing ESG requirements,” said Nick King, head of ETFs at Fidelity International.

Aviva Investors has launched the Multi Asset Fund Core range, extending its multi-asset fund range with five risk-targeted multi-asset funds investing globally across asset classes.  The new funds will make use of ESG optimised strategies, utilising Aviva Investors’ proprietary ESG scoring system. Each of the funds reflect different risk profiles across a broad investment spectrum, described as ranging from “defensive to adventurous”. The funds will also benefit from active ownership, voting and engagement.  The new funds complement the existing actively-managed Aviva Investors Multi Asset Fund range, and will be managed by portfolio managers Guillaume Paillat and Sotirios Nakos.

ADM Capital has launched an emerging Asia renewable energy debt fund with a US$100 million commitment from the Asian Infrastructure Investment Bank (AIIB). The ADM Capital Elkhorn Emerging Asia Renewable Energy Fund represents AIIB’s first commitment to a private debt fund, and aims to address unfulfilled funding needs into the renewable energy sector in Asia. It will provide medium term, senior and subordinated debt financing solutions to renewable energy projects and developers. ADM Capital is targeting a final close of US$500 million in 2021, working with investors to scale up investment into Asia’s renewable energy sector.

Impact-focused fintech iClima Earth plans to list the world’s first carbon avoidance solutions ETF on the London Stock Exchange in early December,  via the HANetf platform. With a focus on companies that directly enable C02e avoidance, the iClima Global Decarbonisation Enablers UCITS ETF (CLMA) features a portfolio of 150 companies which are expected to contribute over 0.6 gigatonnes of new and recurring potential C02e avoidance in 2021. The ETF is designed to build on the “climate change and the transition to a low-carbon economy megatrends”, iClima Earth said. “CLMA allows investors to make a real impact investment via an ETF.  Some climate-related ETFs have experienced exponential growth in the past 20 months and we expect this strong investor interest to continue,” said Nik Nienkowski, co-CEO at HANetf.

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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