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Responsible Funds, Feb. 17: Deutsche AM launches ESG-focused corporate bond ETF

The round-up of responsible funds news

Deutsche Asset Management has created a fixed income ETF to provide investors with ESG-focused exposure to the euro-denominated corporate bond market. It said the db x-trackers II ESG EUR Corporate Bond UCITS ETF (DR) tracks the Bloomberg Barclays MSCI Euro Corporate Sustainable and SRI Index. “More investors are starting to access fixed income exposure using ETFs, so it is important to have ESG-focused bond exposure available in ETF form alongside our existing solutions,” said Petra Pflaum, Chief Investment Officer for Responsible Investments.

A group of more than 100 major institutional investors are reportedly calling on banks funding the controversial Dakota Access pipeline to get it rerouted away from Native American land. The Financial Times said the letter – set to be released later today (Friday) – was a “new front” in the battle to halt the pipeline after approval from President Trump. Some 17 banks are identified in the letter, the FT reported, and quoted CalPERS’ Head of Corporate Governance Anne Simpson as saying they “control the purse strings”. The investors involved have combined assets of $653bn, the report added.

US-based Nuveen Investments, owned by US financial services giant TIAA, is to expand its range of domestic funds focused on ESG internationally. The NuShares ESG International Developed Markets Equity Exchange-Trade Fund (ETF) and the NuShares ESG Emerging Markets Equity ETF will join five US ESG ETFs. The developed-markets fund will track an index derived from the MSCI EAFE index, which excludes both the U.S. and Canada. Meanwhile, the emerging markets ETF index will draw its components from the MSCI Emerging Markets Index. Link

Triodos Investment Management has seen its funds grow by 5% in 2016 to €3.3bn. Among the best performing funds were Triodos Fair Share Fund and Triodos Microfinance Fund which both realised a significant expansion of 10.4% and 17.1% to €328.6m and €357.1m respectively. Triodos Organic Growth Fund strongly increased its assets under management during the year by 24.7% to €40.6m and Triodos Renewables Europe Fund increased its assets under management in 2016 by 14.4% to €73.9m. Significantly, the Triodos Multi Impact Fund, the Triodos fund-of-funds which was launched in December 2015, more than doubled its fund size in its first full year of operation to €39.0 million as per the end of 2016. The fund enables private investors to invest directly in a mix of Triodos investment funds and impact bonds.

Luxembourg special fund LP Lux Investments S.A. SICAVSIF has acquired its first wind farm portfolio based in Finland. The portfolio comprises five onshore wind farms based in three locations. With a total output of 17.25MW, the turbines supply over 10,000 households per year. The investment volume of the whole Lux Investments Fund stands at almost €1bn with wind and solar projects with total volume of almost 500MW in Europe. Its new wind infrastructure sub-fund is still open for subscription and targets long-returns of around 6% per year.

ImpactAssets, a US-based non-profit financial services firm, has released its annual free online database of impact investing fund managers. In its sixth edition, the ImpactAssets 50, features fund managers with $10.6bn in assets under management focusing on areas such as affordable housing and community development, alternative energy and climate change, education, media and natural resources and conservation. The IA 50 Review Committee is chaired by Jed Emerson, Chief Impact Strategist of ImpactAssets, who said: “The IA 50 roster offers a great overview of innovative managers and diverse approaches to creating impact with investment capital.” Link*BlueBay Asset Management* has launched an ESG fixed-income strategy. The global, high-yield bond fund has reportedly been seeded by PKH – the NOK22bn (€2.4bn) Norwegian pension fund for health authorities. The fund will align itself with the exclusion values of Norges Bank Investment Management, which address weapons, tobacco and fossil fuels, and are often used as a benchmark for other asset owners in the country. BlueBay has added an in-house controversial weapons assessment and UN Global Compact criteria.

Twenty-one investors have backed a new C$3.5m (€2.5m) fund in Quebec in response to a mass shooting in the city last month, in which a mosque was targeted and more than 20 worshippers were killed or wounded. The philanthropic fund is called Inclusion and will support awareness and education programmes in schools, and organisations working with young people around anti-discrimination. Investors include BMO, Caisse de dépôt et placement du Québec, Desjardins, Manulife, Royal Bank of Canada, Scotia Bank, Sun Life and TD Bank.

MAPFRE AM, the €5.3bn asset management arm of the insurer, has launched a so-called Good Governance Fund through a Sicav in Luxembourg. The offering is based on academic research jointly commissioned from Cranfield School of Management and Siena University focused on the impact of governance in selecting quality investee companies. José Antonio Méndez and Manuel Rodríguez are the managers of the fund.

A family of five new indexes for long-term investors has been launched by MSCI. The so-called ESG Universal Equity Indexes are designed for asset owners to integrate ESG issues in their investment decision-making, the firm said. It added that the focus of the indexes is on weighting companies rather than excluding them, as well as to maintain broad and diversified equity portfolios. The MSCI ESG Universal Indexes don’t include companies found to be in violation of international norms and those involved in controversial weapons. The Indexes are: MSCI ACWI ESG Universal; MSCI World ESG Universal; MSCI Europe ESG Universal; MSCI EM (Emerging Markets) ESG Universal; and MSCI USA ESG Universal.

PortfolioMetrix, the investment house with offices in London and Johannesburg, is launching a range of portfolios in the UK that utilise funds which put ESG “at the centre of their investment processes”. The Ethical Emphasis range will focus on achieving a positive social and environmental impact without sacrificing clients’ financial objectives and “seek to invest in securities which strongly benefit society”.

The Church Investment Group, the US-based non-profit Episcopal investment body, says its new fossil-free portfolio has been taken up the Diocese of New York and All Saints Episcopal Church in Pasadena. Stocks and bonds in the portfolio meet ethical criteria including responsible employment, corporate governance and environmental practices and conscientious human rights policies. “CIG’s fossil fuel-free investment approach allows us to earn a good return on our money while being good stewards of God’s creation,” said the Rt. Rev. Andrew M. L. Dietsche, bishop of New York. CIG manages portfolios of more than $64m for Episcopal endowments, said managing director JoAnn Hanson. The group uses the investment firm Hirtle Callaghan as its chief investment officer.

Grab, the Southeast Asian ride-hailing platform, is reportedly planning to launch a $100m social impact investment fund. Reports said the ‘Grab 4 Indonesia’ offering would invest in companies focused on deepening financial inclusion.