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Responsible Funds, August 16: Border to Coast Pensions, Vanguard, vegan ETF, UBS Asset Management, BlackRock

The latest responsible funds news

Border to Coast Pensions Partnership, the UK pension pool operator, has launched a procurement for an alternatives due diligence provider. The Leeds-based outfit, said it has recently launched its alternatives private markets structure and has commenced making capital commitments on behalf of its investors. Assets are expected to increase to c.£5bn over the next three to five years. Up for grabs is a 48-month contract with an option to renew for two further periods of two years each. The deadline for receipt of tenders is October 4.

Two Vanguard funds marketed as ESG and weapons-free have dropped nearly 30 “erroneously” included stocks, including gun maker Sturm Ruger, private prison operator Geo Group and media company News Corp. As reported in the Financial Times, Vanguard told shareholders in a letter that the Vanguard ESG US Stock ETF and the Vanguard ESG International Stock ETF had axed the 29 stocks, explaining the companies had been “incorrectly included” in an ESG index designed by FTSE Russell.

Vegan investment specialist Beyond Investing is to launch what it calls a first-of-a-kind US Vegan Climate ETF (VEGN) on the New York Stock Exchange on September 10. The fund will track the US Vegan Climate Index, also launched by Beyond Investing, which takes the Solactive US Large Cap index and excludes and replaces any stocks “incompatible with a vegan and climate-conscious approach to investing”. As well as companies relying on animal-derived products, the fund screens out exposure to fossil fuels, plastics, agrochemicals, and other stocks that are harmful to animals.

ESG fund launches surged in Europe in the first half of 2019, with a record 168 coming to market, research conducted by Morningstar has shown. Morningstar’s newly-released ‘European Sustainable Funds Landscape’ report shows that AUM in ESG strategies grew a record 20.5% to €595bn over the same period, supported by record net flows of €36.9bn and positive stock market returns. In 2018, net flows stood at €38bn for the full year.UBS Asset Management has launched three new sustainable ETFs, two consisting of equities and the other of bonds. The UBS ETF (LU) Euro Stoxx 50 ESG UCITS ETF uses Sustainalytics data to screen out low scoring blue-chip eurozone stocks; the UBS ETF (LU) MSCI China ESG Universal UCITS ETF targets Chinese equities; and the UBS ETF (LU) JP Morgan USD EM IG ESG Diversified Bond UCITS ETF invests in US dollar-denominated emerging market debt. The funds are available in USD as well as currency-hedged share classes.

BlackRock has become the largest shareholder in Authentic Brands, the licensing group that owns the likeness rights to celebrities including Marilyn Monroe and Elvis Presley, with an $875m controlling stake made through its new private equity fund, Long Term Private Capital. The giant asset management house raised $2.75bn for the fund earlier this year amid a push from CEO Larry Fink towards the meatier returns from private equity.

Environmental specialist Turquoise International has been appointed fund manager for the Low Carbon Innovation Fund 2 (LCIF2). The venture capital fund will invest nearly £11m from the European Regional Development Fund (ERDF), to be at least matched by private sector co-investment through a partnership between the University of East Anglia and Norfolk County Council. The original Low Carbon Innovation Fund, also managed by Turquoise, supported more than 70 companies delivering low carbon technologies and generated over £68m of investment in the East of England region.

Neil Goddin, co-manager of the Kames Global Sustainable Equity Fund, has named his top three stocks for helping save the planet: Tomra Systems, which makes sorting and reverse vending machines to be used in efforts against plastic waste; DiaSorin, which specialises in DNA testing for disease; and PeptiDream, which uses peptides – a form of amino acid – “to revolutionise the drug discovery process”.