Responsible Funds, Feb. 20: Calvert, Threadneedle, IFFIm, Victoria Funds Management Corp.

The round-up of responsible funds news

Calvert Investments, the US socially responsible investing specialist, has issued a prospectus for two new funds, the US Large Cap Growth Responsible Index Fund and the US Large Cap Value Responsible Index Fund. They will track, respectively, two indices (the Calvert US Large Cap Growth Responsible Index and the Calvert US Large Cap Value Responsible Index). Both funds, set to launch in May, will be managed by Natalie Trunow, Calvert’s Chief Investment Officer -Equities, and Matthew Moore, Assistant Portfolio Manager and Head Trader.

The social bond fund launched by Threadneedle Investments last year has returned 11.8% in its first calendar year of operation. It has reached £67m (€91m) in assets, the firm said. Launched in January 2014 in partnership with Big Issue Invest, the social investment arm of The Big Issue, the Threadneedle UK Social Bond Fund has received a “steady inflow” from retail and institutional investors, most recently from the City of London which invested £1m in November last year. This was preceded by an allocation of £40m by Warwickshire County Council in October. The fund is invested in 80 bonds from 59 issuers.

The International Finance Facility for Immunisation, the body behind “‘vaccine bonds” in the capital markets, is expecting to raise up to $500m on global bond markets this year, according to a Reuters report citing chairman Rene Karsenti. Since inception nine years ago, IFFIm has raised over $5bn for the Global Alliance for Vaccines and Immunisation (GAVI), the not-for-profit body providing vaccines to children worldwide. Last year IFFIm issued its first sukuk, or Islamic bond, last year, the report added.

Canada’s mutually owned Desjardins Investments, the manager of the Desjardins Funds, has announced the termination of the Desjardins Global Real Estate Fund as of March 30. Unit holders can choose to transfer their investments to another Desjardins Fund or to file a request with the manager to redeem their units. Montreal-based Desjardins is the fifth largest cooperative financial group in the world with assets close to C$227bn (€160.4bn).

Schroders’ $205.8m Global Climate Change Equity offering has returned 2.6% in the three months to the end of January, according to a fund update. This compares to a -1.5% return at its MSCI World – Net Return benchmark over the same period. The fund, managed by Simon Webber and Ben Wicks, aims for “capital growth primarily through investment in equities securities of worldwide issuers which will benefit from efforts to accommodate or limit the impact of global climate change”.Australia’s Victoria Funds Management Corporation (VFMC), the A$46.6bn (€32.2bn) state-owned asset management concern, has reportedly announced that it will divest from direct investments in tobacco firms. The Sustainability Report cited the VFMC as saying the divestment should be finalised by the end of the second quarter of this year.

The €93.5m Pictet European Sustainable Equities fund returned 8.06% in January (against a 7.23% return for its MSCI World benchmark). Over three months, the return is 12.6% (9.07%) and over the year to the end of January, according to fund documents, it has returned 24.3% (16.6%). Managed by Laurent Nguyen, the sub-fund seeks capital growth by investing at least two-thirds of its total assets in the shares of companies which “apply the principles of sustainable development”.

Candriam Investors Group, the former Dexia Asset Management which is now part of New York Life Co., says its SRI funds are now offered for sale in France. It follows France’s environmental Grenelle II Law of 2012. Under Article 224 of the decree, asset managers provide information on Environmental, Social and Governance criteria which they apply in their investment process, Candriam said. It added that just under 12% of the total assets of its funds authorised for sale in France were Sustainable & Responsible Investments. Link

Performance was “challenged but positive” in January at the UBS Emerging Markets Sustainable fund, according to a manager commentary. The main positive contributors included the Foschini Group (retail), Wuxi Pharmatech (healthcare), HCL Technologies (IT services) and Soulbrain (Korean IT). The portfolio remains focused on bottom-up stock selection of companies that benefit from sustainability-related trends in developing countries.

The Triodos Fair Share Fund and Triodos Microfinance Fund are jointly contributing $11.4m to Janalakshmi Financial Services, one of the three largest microfinance institutions in India. This loan will help Janalakshmi to expand further into the small- and medium-sized enterprises (SME) market. Karel Nierop, Senior Investment Officer, said: “This joint transaction with FMO provides the opportunity to let a renowned leader in the Indian MFI space expand its SME portfolio and leverage on its capital and technology base, truly creating impact in financial inclusion.” Triodos has also taken a 13.7% equity share in the largest microfinance institution in Kazakhstan, KMF LLC (formerly the Kazakhstan Loan Fund).