ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria.
Legal and General Investment Management (LGIM) has launched its Low Carbon Transition Index Equity Fund, which will leverage LGIM’s climate scoring framework. The fund will reduce initial exposure to carbon-emitting assets by 70%, with the ultimate objective of achieving net-zero emissions by 2050. “Addressing climate-related concerns is of paramount importance to our clients given growing regulatory pressures and the global shift towards net-zero,” said Stefan Jean-Luc Bilby, Senior Index Distribution Manager at LGIM.
Invesco has launched an open-ended equity scheme investing only in ESG themes, the Invesco India ESG Equity Fund. Benchmarked against the NIFTY 100 Enhanced ESG Index, the fund will mainly invest in large cap companies, but will offer a 35% exposure to mid and small cap companies. “Companies with strong ESG propositions are creating value through increased top-line growth, lower costs of production, better financing terms, government support and subsidies, motivated employees and enhanced returns on capital invested, which in turn help investors in long term wealth creation,” said Saurabh Nanavati, CEO of Invesco’s Indian business.
PGIM Global Investment Management has expanded its ESG offerings with the launch of the PGIM Global Total Return ESG Bond Fund. The fund aims to deliver returns in excess of the Bloomberg Barclays Global Aggregate Index, by investing in a diversified portfolio of securities across global fixed income. “We continue to have conversations with clients across the globe wanting to increase portfolio allocations to ESG investments. As investors moved back into the market post the Covid-19 drawdown, we saw an acceleration into ESG funds. Coupled with the rising demand, we also see government stimulus packages and regulation focused on ESG,” said Kimberly LaPointe, Head of PGIM Investments’ international business.
Northern Trust Asset Management has launched two smart beta ESG strategies incorporating climate factors. The FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD) and the FlexShares Developed Markets High Dividend Climate ESG UCITS ETF (QDFD) are listed on the London Stock Exchange and Euronext Amsterdam. QVFD tracks the iSTOXX Northern Trust Developed Markets Low Volatility Climate ESG index and QDFD tracks the iSTOXX Northern Trust Developed Markets High Dividend Climate ESG index. “Actively designed with the transparency of indexing, these two ETFs are built specifically to fit within EMEA investors’ evolving needs to help manage portfolio volatility and deliver income in a low yield environment while doing so with a focus on quality,” said Marie Dzanis, Head of EMEA at Northern Trust AM.
DWS has launched ESG ETF versions of two existing indices: S&P MidCap 400 and S&P SmallCap 600. The new Xtrackers S&P MidCap 400 ESG ETF (MIDE) and Xtrackers S&P SmallCap 600 ESG ETF (SMLE) will apply exclusions and rankings filters in order to track only the ESG funds within the MidCap and SmallCap indices. The new listings complement the prior launch of DWS’s Xtrackers S&P 500 ESG ETF, which was launched in 2019 and currently has US$400 million in AUM. “At DWS, we have made ESG-centric investing integral to our value proposition for our clients and the launch of MIDE and SMLE is a logical follow-on,” said Arne Noack, DWS Head of Systematic Investment Solutions, Americas.
ATR Asset Management (ATRAM) has become the first firm based in the Philippines to launch an SDG-focused fund. The ATRAM Philippine Sustainable Development and Growth Fund invests in domestic companies that score highly in terms of integrating SDG goals. “Philippine companies are still developing their own SDG approach as they transform their efforts from CSR and ERP towards sustainable investing and ESG risk management. It is still very much early days for sustainability integration for the Philippines relative to more advanced markets such as Europe. The first step is really reporting standard ESG risk factors such as their carbon footprint, water and energy intensity, and that’s where we generally are – the first step,” said Jose Mari Lacson, Head of SDG Research at ATRAM.
Former AON Research Head David Hunter and ex-Unilever CIO Wendy Mayall have launched Renewity – a multi-manager platform that aims to invest only in renewable energy. With more than US$300 billion needed to invest in renewables a year in order to meet the 2015 Paris Agreement goals, Renewity will focus on both distributing and deploying assets at scale to close the funding gap. “As investors we’re not moving fast enough, nor at sufficient scale, to address the urgent climate challenge. The growing complexity and number of renewables managers across countries, strategies and technologies requires focused manager research to deliver effective solutions for investors,” Hunter said.
