Friday Funds: News from AGF, JP Morgan, Skandia, AXA IM, Morgan Stanley Investment Management and many more

The latest developments in ESG-related funds

Canada-based AGF Investments has announced a new exchange traded fund; the AGF Global Sustainable Growth Equity ETF seeks to provide long-term capital appreciation by investing primarily in a diversified portfolio of equity securities, which fit the asset manager’s concept of sustainable development. AGF also announced management fee reductions and series terminations for its AGF Global Sustainable Growth Equity Fund, to streamline the firm’s sustainable product offerings and ensure they are competitively priced and responsive to investor needs and market trends.

J.P. Morgan Asset Management has registered its Global Bond Opportunities Sustainable Fund; this will invest in sustainable debt securities issued by companies and countries that demonstrate effective governance and superior management of environmental and social issues. The Luxembourg-domiciled flexible bond strategy is available for retail investors in Singapore – it was previously offered to investors in Europe.

The first verified social Bonds for primary and secondary education in the US have closed at $204m; the bonds saw high investor demand and was eight times oversubscribed with over $1.2bn in orders from 33 investors. Issued by the Equitable School Revolving Fund, a non-profit social impact fund, the bond offers investors a 2.18% return on a 30-year maturity, with the proceeds going to help finance public charter schools that are providing transformative educational opportunities for students, especially in low-income and under-resourced communities.

Skandia has redesigned four index-linked funds, with total assets under management of SEK14bn (€1.34bn). The funds are: Skandia Europa Exponering, Skandia Nordamerika Exponering, Skandia Japan Exponering, and Skandia Global Exponering – their names, fees, and risk levels have been retained, but the sustainability level and benchmark index have changed. This means companies that extract or generate power from fossil fuels, produce weapons, tobacco, cannabis or violate international standards are completely excluded. Additionally, the funds will now follow a new benchmark indices that Skandia has developed in collaboration with MSCI, where companies on Skandia's exclusion list for funds with a sustainable focus are excluded.

Private equity firm ADM Capital Europe has announced that its Cibus Enterprise Fund has acquired a 11.7% stake in the Norwegian agricultural robotics company, Saga Robotics. The Fund looks to invest into game-changing technologies that will improve the efficiency of agriculture and food production, thereby enabling the world to grow more food sustainably and of better quality.

AXA Investment Managers is launching its first multi-asset impact fund; the AXA WF Multi Asset Optimal Impact fund will invest in securities demonstrating a positive social and environmental impact, while aiming to generate financial performance based on strong convictions and a flexible approach to better navigate the changing macroeconomic environment. Managed by Serge Pizem, Head of Multi-Asset at AXA IM, and his team, the fund is part of the Optimal Income range, with 5% of its management fees being donated to charities.

Morgan Stanley Investment Management has raised over $4bn in assets for the new Global Change Strategy fund, available in Japan; this equity strategy seeks to maximise long-term capital appreciation by investing in high quality companies with strong ESG alignment. Developed with Mizuho Securities, the fund avoids businesses operating in industries with material environmental and social externalities and/or corporate governance issues, in a highly concentrated portfolio of 20-40 names.

Wind and solar development company, Mainstream Renewable Power closed the second phase of its $1.8bn wind and solar power generation platform in Chile; this brings the total raised so far to $1.25bn. The $620m secured in this round came from a consortium of five banks: IDB Invest, KfW IPEX-Bank, DNB, CaixaBank, and MUFG.

Somerset Capital Management has launched the Somerset Emerging Markets Future Leaders UCITS Fund. The Fund by the investment management firm will mainly invest in medium-sized businesses that derive the majority of their earnings in emerging markets, with a market cap range generally between $750m and $13bn. It will be seeded with c. $350m from the Swedish National Pension Fund, Första AP-fonden (AP1), with which Somerset has worked since 2013.

Unilever’s investment services has awarded an €11bn mandate to Universal-Investment group for its Univest pooled funds, set up by Univest Company, Unilever’s in-house investment services company. Universal-Investment group will take over the controlling of risk management and portfolio management, whilst Northern Trust will continue to provide custodian and fund administration services for Univest.

As of June 30, 2020, there were 534 sustainable index mutual funds and exchange-traded funds globally, with collective assets under management of $250bn; this means both the number of products and the money invested in them have more than doubled over the past three years, according to research by Morningstar Manager Research. The ‘Passive Sustainable Funds: The Global Landscape 2020’ also found that Europe remains the largest market for sustainable passive funds, accounting for more than three fourths of global assets; more broadly, the total number of sustainable passive funds available to investors globally more than tripled over the trailing five years to the end of June 2020.

Triodos Bank has bolstered its UK impact investment portfolio with its new Triodos Sterling Bond Impact Fund; with a pre-launch subscription on 24 September, the fund will offer corporate, social, and green bonds to deliver impact. This is the first time that Triodos Investment Management has issued a fund in sterling; issuers and projects are selected for their contribution to seven sustainable transition themes.

Specialist thematic ETF issuer, Rize ETF, has issued two new ETFs: the Rize Sustainable Future of Food UCITS ETF (FOOD) and the Rize Education Tech and Digital Learning UCITS ETF (LERN) – both are claimed to be the first of their kinds in Europe. The first provides investors with exposure to companies that are innovating across the food value chain, whilst the second gives investors exposure to companies that are redefining how education is accessed.. Both are tradeable on the London Stock Exchange, the Deutsche Börse, and the Borsa Italiana.