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Friday Funds: Launches from Morgan Stanley, JP Morgan, Aberdeen Standard, LGIM, Mirova and others

The latest developments in ESG-related funds

Morgan Stanley Investment Management (MSIM) has launched its UK Sustainable Fixed Income Opportunities Fund, which will maintain a net positive alignment with the United Nations’ Sustainable Development Goals (SDGs), while also investing in Green, Social, and other labelled Sustainable Bonds. The fund, managed by MSIM’s Global Fixed Income Investment team, will screen out controversial sectors and tilt the portfolio in favour of the 80% strongest sustainability performers across sovereigns and corporates.

The UK’s Greater Manchester Pension Fund, along with the Greater Manchester Combined Authority and Big Society Capital, have invested £20m into Resonance’s new UK homelessness property fund. The social impact investment manager’s National Homelessness Property fund 2 is targeting a size of £50-£100m in investment from institutional, pension fund, foundations, and professional investors, in order to provide approximately 870 affordable homes across the UK.

J.P. Morgan Asset Management has launched its first OEIC [open-ended investment company] offering, the JPM Emerging Markets Equity Sustainable Fund. The fund, which is also the first sustainable UK domiciled active fund in the Investment Association’s Global Emerging Markets Sector, will exclude unsustainable sectors and apply proprietary exclusions based on internal research, to identify which companies are considered ESG leaders and can demonstrate the economic sustainability of their business models.

Osmosis Investment Management has partnered with the Commonwealth Superannuation Corporation (CSC) – the A$50bn fund for Australian government employees – to launch a Resource Efficient Core Equity Portfolio, which will aim to mitigate environmental risks. The portfolio will be 60% more resource efficient than the MSCI World (ex-Australia) benchmark and will be aligned with the former’s ethical exclusion list and CSC's exclusion policy.

Aberdeen Standard Investments has launched a sustainable development fund, which will provide investors with access to SDG-aligned companies across emerging markets. The Aberdeen Standard Emerging Markets Sustainable Development Equity fund will consist of 30-60 stocks and will seek to outperform its MSCI Emerging Markets index before fees, which includes a 1.3% annual management for retail investors.

Legal & General Investment Management’s Real Assets arm has provided €54m in long-term financing to Clúid Housing, one of Ireland’s largest approved housing bodies. 

LGIM has also launched a tilted climate transition index equity fund for defined benefit and defined contribution investors. The FTSE TPI Global (ex Fossil Fuels) Equity Index Fund’s constituents are adjusted based on their fossil fuel reserves, carbon emissions and green revenues, as well as on the Transition Pathway Initiative’s analysis of how the largest and most carbon intensive public companies are managing the climate transition. Already it has received an initial investment from the Atos UK Pension Schemes and will also be offered as an investment option on the PensionBee platform.

Mirova has launched its US Sustainable Equity Fund (MUSYX), which seeks long-term capital appreciation by maximizing exposure to companies with a positive impact on the SDGs, as well as those with strong performance on material ESG indicators.  The fund, by the affiliate of Natixis Investment Management, seeks to maintain a relatively concentrated portfolio of approximately 30-50 US stocks.

BNP Paribas’s Energy Transition fund has returned more than 132% since the start of this year; in addition, in the past five weeks alone its size has doubled to more than €1.5bn. The asset manager has pointed to regulatory change, technological advancement, and investor demand as reasons for the surge in the equity fund, which invests in companies that are driving change across three core themes of decarbonisation, digitalisation, and decentralisation.

A suite of Nordea Asset Management’s funds, including its popular STARS equity strategies, will now be available to FinecoBank’s platform users. Already this year, the FinTech multi-currency bank has announced partnerships with more than 10 fund providers, including: Carmignac, Robeco, JP Morgan Asset Management, Fidelity Investments, Aberdeen Investments, M&G Investments, and Columbia Threadneedle Investments. 

Local Pensions Partnership Investments, London CIV, and the London Pensions Fund Authority announced the first close for The London Fund after securing £100m investment from the London Pensions Fund Authority, toward its targeted £300m offering. The Fund will focus on investment opportunities in residential property and affordable housing, community regeneration, digital infrastructure, and clean energy.

Ethos, the Swiss Foundation for Sustainable Development, and Swiss bank Banque Cantonale Vaudoise (BCV) have launched the Ethos Swiss Sustainable Equities investment fund. Intended for both private and institutional investors, it currently has CHF160m in assets under management. The fund is part of a longer term partnership between the two, which will see the assets of five other Ethos funds – two equity funds, two bond funds, and one asset allocation fund – transferred to BCV by the end of March 2021.