Friday Funds: French bodies create definition for impact investment funds

The French Responsible Investment Forum (FIR) and private equity body France Invest have published a definition of ‘impact investing’ that aligns with 190 funds from 60 asset managers in the country. Impact investing : a demanding definition for the listed and unlisted, has been under development for two years, and outlines expectations for impact investing including intentionality, additionality and the measurement of impact. It was produced by a 52-strong working group of FIR and France Invest members and covers listed and unlisted strategies and firms. 

Flows into passive sustainability funds grew 27% in February, according to a note from Morgan Stanley, reaching $23bn compared with $18bn in January. However, there was an 11% drop in flows into active funds over the period, from $40bn to $35bn – bringing the passive/active split to 40%/60%. Overall sustainability fund flows for the month were stable at $58bn. Morgan Stanley also highlighted a 2-3% underperformance of MSCI’s headline SRI indices since the start of February, with particularly low performance in Europe. 

Invesco has launched two new ESG ETFs, bringing the number of ESG ETFs it has created this year to six. The first fund is a UK-based climate equities UCITS, tracking the FTSE All Share. The second is an MSCI-based UCITS fund with heightened exposure to European companies with a “robust and improving ESG profile”.  

UBS Asset Management has launched an ETF tracking the S&P 500 ESG Elite Index, which includes companies with the highest ESG rating from S&P Dow Jones Indices. The index also excludes companies involved in a number of sectors including palm oil, fossil fuels and predatory lending. UBS has also launched a climate aware equity ETF, which tracks the Solactive UBS Climate Aware Global Developed Equity CTB Index.

Federated Hermes is due to launch a new Sustainable Global Equity Fund. The fund, which will be managed by Martin Todd, will use exclusions and sustainability scores, and will focus on environmental preservation, social inclusion, health and wellbeing and efficient production and resource usage.

BMO Global Asset Management has launched two multi-asset sustainable funds. The BMO Sustainable Universal MAP Adventurous Fund will target a return of CPI + 5% over five years, while its ‘defensive’ equivalent will target CPI + 1%.

T. Rowe Price has launched its first impact investment fund. The actively-managed Global Impact Equity Fund will be benchmarked against the MSCI All-Country World Index and will invest in 55-85 securities that fund manager Hari Balkrishna believes will have a positive environmental and social impact, aligned with the Sustainable Development Goals.