Fund Solutions

This Week’s Fund News: Manulife IM Launches Global Climate Action Fund

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Manulife IM, AXA IM, Nordea, DWS, Oaktree Capital, Ossiam, and Swiss Life Asset Management.

Manulife Investment Management, the Toronto-based global wealth and asset management arm of Manulife Financial Corporation, has launched the Manulife Global Climate Action Fund. The SFDR Article 9-compliant fund is for European institutional investors and aims to encourage investment in “innovative” organisations that contribute to achieving net zero. Patrick Blais, Manulife’s fundamental equity team head, said: “Whilst some funds focus on passively investing in companies who have low greenhouse gas emissions, we seek to invest in companies likely to significantly reduce emissions, by looking for companies who have incorporated science-based targets into their business to ensure long-term, measurable impact, which should help lead to a faster route to achieving net zero objectives”. The firm is further expanding its range of European offerings with three additional Manulife Global Fund sub-funds. The Sustainable Asia Equity Fund, Asian High Yield Fund, and U.S. Small Cap Equity Fund aim to capitalise on the sustainability opportunities that exist in the region and provide investors with access to “compelling investment opportunities” across Asia and the US.

AXA Investment Managers (AXA IM), a global investment management firm with over €823 million in assets under management, has unveiled an active management and responsible investment focused ETF platform. Through the platform, AXA IM aims to offer investors and clients seeking increased liquidity and transparency a ”complementary value proposition in an ETF structure”. In addition, it will provide access to AXA IM’s “strengths across responsible investment, quantitative investing and trading”. Marco Morelli, AXA IM’s Executive Chairman, said: “This platform will complement our existing fund range while answering client demand for ETF structured vehicles and offering them a better trading experience as well as easy access to such strategies, high liquidity, and enhanced transparency due to the nature of these products.” The platform will launch with two actively UN SDG-aligned ETFs, classified as Article 9 funds under SFDR, with the dual objectives of seeking to deliver long-term financial growth and a positive and measurable impact on the environment. The two ETFs launched will focus on climate and biodiversity themes.

Nordea Asset Management (NAM), the Copenhagen-based arm of the Nordea Group, is launching the Nordea 1- Global Sustainable Listed Real Assets Fund. The Article 9-compliant fund aims to invest in listed real assets focused on environmental/social stewardship and technological innovation. Through this, NAM hopes to provide a solution creating exposure to sustainable listed real estate and infrastructure companies with assets reliable for having stable and predictable cash flows. The fund is designed to “address today’s unique global challenges” through sustainable listed real assets offering a hedge against inflation, investments in modern and energy-efficient solutions and being aligned with themes including decarbonisation, modernisation, affordable housing and sustainable cities. Jeremy Anagnos, NAM’s Nordea 1 Portfolio Manager, said: “Powered by ongoing governmental initiatives, supportive investors, and aspirational underlying tenants and stakeholders, we see tremendous near and long-term tailwinds for sustainability-focused real assets.”

German asset management firm DWS has announced the launch of three new Xtrackers ETFs. These aim to “provide exposure” to the European, US and Japanese equity markets, with the ETFs qualifying as Article 9 under SFDR. DWS now provides five Paris Climate Agreement-oriented ETFs and are subject to the recommendations of the IIGCC. The Xtrackers USA Net Zero Pathway Paris Aligned UCITS ETF, the Xtrackers Europe Net Zero Pathway Paris Aligned UCITS ETF and the Xtrackers Japan Net Zero Pathway Paris Aligned UCITS ETF aim to reduce emissions in line with the objectives of the Paris Climate Agreement. The ETFs track Solactive-ISSESG Net Zero Pathway indices, targeting a 50% reduction in carbon intensity compared with the equivalent non-ESG market benchmark, in addition to a continuous reduction in carbon intensity of 7% year-on-year. Simon Klein, DWS’ Global Head of Passive Sales, said: “With the new ETFs, we are expanding our range of climate agreement-oriented ETFs to include important investment regions with a view to performance potential and diversification.”

Oaktree Capital Management, an American global asset management firm with US$159 billion in assets under management, has launched the Oaktree Global High Yield Responsible Fund. The Luxembourg-domiciled UCITS fund will be actively managed in line with the firm’s Global High Yield Responsible strategy, which aims to “earn an attractive total return” through investment in North American and European high yield bonds while managing risk and promoting progress toward a low-carbon economy. Madelaine Jones, Sheldon Stone, David Rosenberg, and Anthony Shackleton will serve as co-portfolio managers. Peter Preisler, Oaktree’s Head of Europe and Africa, Marketing and Client Relations, said “The Global High Yield Responsible Fund represents a natural extension of Oaktree’s tremendous high yield bond heritage and underscores our commitment to responsible investing. The Fund offers investors the opportunity to gain exposure to the asset class while promoting progress toward a low-carbon economy.”

Paris-based quantitative investment manager Ossiam, an affiliate of Natixis Investment Managers, has launched eight ETFs aligned with the goals of the Paris agreement. The ETFs are based on Bloomberg Paris-Aligned Benchmarks (PABs) covering all major developed equity investment markets, and are domiciled in either Ireland or Luxembourg. The Article 9-compliant ETFs aim to provide investors with exposure to companies which are trying to reduce greenhouse gas emissions, implying a reduction of at least 50% in relation to the 2020 base year and a 7% year-on-year reduction until 2050. The Ossiam PAB strategies favour companies with certified, scienced-based GHG reduction targets and exclude companies that are detrimental to environmental objectives. Paul Lacroix, Ossiam’s Head of Structuring, said: “We can offer investors the most advanced and authentic approach to track equity markets with a trajectory for continuous carbon footprint reduction.”

Swiss Life Asset Managers is launching its second dedicated international renewable energy infrastructure fund, the Fontavis ESG Renewable Infrastructure Fund II. The fund will invest in unlisted clean energy and infrastructure assets and companies with the objective of building a globally diversified portfolio of direct infrastructure energy investments. The targeted amount for the fund is €750 million; it will be open to qualified investors with a desire to invest in projects with “attractive growth prospects”. The fund will be advised by a dedicated renewables team, building on strong and long-term partnerships with investors, energy companies, project developers, public authorities, and other stakeholders combining to provide opportunities for investing its clients’ capital. Marc Schürch, Swiss Life Asset Managers’ Renewable Energy Head, said: “We want to apply our deep know-how of the energy sector and invest in all fields of the energy transition. As such we contribute on behalf of our investors to make electricity generation, heat supply and mobility more sustainable.”

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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