Swedish pension fund Första AP-fonden, better known as AP1, has seeded what it describes as “the next generation of index funds” for emerging markets responsible investors, in partnership with Legal & General Investment Management (LGIM).
The SEK355bn (€35bn) public ‘buffer fund’ has put an undisclosed amount into a pooled, index-linked vehicle called the Emerging Market Equity Future Core Fund, launched this week. The fossil-free fund reweights its large- and mid-cap constituents based partly on their sustainability performance.
The investment is part of long-running efforts by AP1 to “replace all passive mandates” in emerging markets with more innovative versions that enable it to improve sustainability performance. Two years ago, it kicked off those efforts by seeding an ESG product from BlackRock.
Last month, it worked with French asset manager Tobam, to remove fossil fuels from its systematically-managed emerging market equities and …