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Responsible Funds, April 7: AP1, Brown Advisory, Hostplus, Scotia iTRADE, S-Network Global, Incofin

The latest responsible funds developments

AP1, the Swedish buffer fund, has committed $250m to a new fund by London-based firm Osmosis. The fund invests in companies that have good resource-efficiency performance, and Osmosis claims that – based on back-dating – it would have delivered annualized returns of more than 10% (before fees) since 2005. This is compared to a benchmark performance of 7.5% over the same period. Swedish furniture giant Ikea is also reported to have backed Osmosis by investing $270m in a second resource efficiency fund. Osmosis specializes in energy efficient and climate-aligned funds, and manages almost $1bn of assets.

Brown Advisory, the Baltimore-based funds firm, has launched its U.S. Sustainable Growth UCITS Fund, having had a U.S. Sustainable Growth strategy in place since 2009 (a U.S. mutual fund followed in 2012). Co-Portfolio Managers are Karina Funk and David Powell.

Caja de Ingenieros Environment ISR is the second responsible fund launched by Caja de Ingenieros Gestión, a Spanish asset manager that has been a PRI signatory since 2014. Equity will represent between 50-75% of the fund while the rest will be invested in fixed income, in both cases for a minimum of four years. The fund is focused on climate change, prioritising those companies that are committed to emissions reduction targets. Caja de Ingenieros Gestión previously launched the fund Fonengin ISR, managed by Xosé Garrido.

Fineco, also a Spanish asset manager that is a PRI signatory, and which is part of the Basque banking group Kutxabank, has launched a responsible fund called Fon Fineco Inversión Responsable. Its portfolio will be built using information provided by MSCI ESG Research and the custodian is BNP Paribas Securities Services in Spain. San Sebastian/Donostia-based Kutxabank itself claims to be a “socially-conscious financial institution that leads the financial sector in its area of influence”. Link

Custom index firm S-Network Global Indexes has launched its new IDBIIC Latin America Corporate Sustainability Index (IndexAmericas), which recognises leading sustainability companies in Latin America and the Caribbean – the first of its kind. The index is a collaboration with the Inter-American Development Bank (IDB) and the Inter-American Investment Corporation (IIC), with the ESG data powered by Thomson Reuters Global ESG Research.

Swiss energy, food, and water (EFW) efficiency firm EFW Swiss AG has announced that its EFW Efficiency Fund – which follows the company’s bespoke EFW Efficiency Index – is up 5% this year, and 2% up since its inception in 2014 – consistently outcompeting MSCI’s World ESG and ACWI indexes, and the Dow Jones Sustainability Index. The EFW Efficiency Index is built around the thesis that financial performance is correlated to a company’s energy, food, and water efficiency.Hostplus, the A$22bn (€25.6bn) superannuation fund for Australia’s hospitality, tourism, and recreation sector, has reportedly launched its first SRI option. Australian specialist AMP Capital will manage the option as part of its Responsible Investment Leaders Balanced Fund. Hostplus joins AustralianSuper, First State Super, QSuper, Media Super, WA Super, and Australian Catholic Super as Australian super funds that offer SRI options.

Triodos Bank Spain has plans to launch responsible funds in the country during the first half of 2017. A spokesperson told RI more details will be provided in June, the scheduled date of the launch.

New investors such as AXA Investment Managers and KBC Pensioenfonds have committed $27m to the agRIF fund from Incofin Investment Management. Launched in 2015, the agRIF fund seeks to address the scarcity of financial services adapted to the needs of smallholder farmers. Initial investors included the European Investment Bank, France’s Proparco, the Swiss Investment Fund for Emerging Markets (SIFEM) and others. To date, agRIF has invested $34m in Latin America, Africa and Asia; its final close will be in June 2017.

A recent survey by AXA Investment Managers has found that 35% of insurers take RI or ESG criteria into consideration when making asset allocation decisions for their portfolios, yet 53% of respondents cited tighter regulation as the primary driver behind the implementation of RI/ESG policies. Matt Christensen, Global Head of Responsible Investment at AXA IM has called for a more ‘proactive’ approach to ESG by insurers in order to maximise its long-term future benefits. The link between RI/ESG and performance came out as the 2nd most important driver (40%) in the report, and for almost a third (31%) of respondents it was peer pressure that was cited as a key driver.

Conquest, the Luxembourg-based independent asset management firm, has raised €115m at the initial close of its Conquest Renewable Yield Europe fund. The fund, which has a 20-year strategy, will deploy ‘equity in OECD renewable power real assets’ in Western Europe.

Scotia iTRADE, Scotiabank’s online brokerage service, has unveiled Canada’s first sustainable investing tools for direct investors. The new tools offer detailed environmental, social, and governance (ESG) data based on individual companies’ corporate practices.

Dutch development bank FMO has invested in US microfinance firm Accion’s $141m global ‘fintech’ fund – The Accion Frontier Inclusion Fund. The oversubscribed fund, managed by Quona Capital, aims to invest in companies that will catalyse the expansion of financial services in emerging markets that are currently underserved.

UK renewable energy firm Thrive has raised £10m on its latest bond issuance with 933 individual investors contributing. The bond offer, promoted by Dutch sustainable bank Triodos, was made available online by UK Abundance Investment Ltd – an ESG-focused digital investment platform.