Responsible Funds & Indices, Feb. 7: Nigeria exchange plans tradable governance index

Domini Social Investments, the US sustainability specialist, says its Social Equity Fund and International Social Equity Fund both outperformed their benchmarks for 2013. The former returned 32.85%, beating the S&P 500 Index (+32.39%). The latter outperformed its benchmark by more than 2%, returning 25.77% versus 23.29% for the MSCI EAFE Index.

Investor demand has prompted Greencoat UK Wind, the listed infrastructure fund invested solely in operational UK wind farms, to issue 2m new shares at 102.5 pence each. It said the issuance should enhance liquidity in its shares and the proceeds will be used to repay outstanding debt. UK Wind is currently invested in ten wind farms, both onshore and offshore, with net generating capacity of 184.0MW.

The Jupiter Climate Change Solutions fund managed by Charlie Thomas has been renamed as the Jupiter Global Ecology Growth, though there won’t be any changes to investment policy or strategy. The fund was launched in 2001 and generated a total return of 94.5% over the 10 years to the end of 2013.

Solar photovoltaic module maker Upsolar has become a seed investor in a new fund created to promote renewable energy technology. It will put $20m into the Empower vehicle managed by Luxembourg-based Archeide Lux. The fund will promote the development of low-carbon electricity—including solar, wind, hydroelectric, biomass and energy efficiency projects—across Europe, Asia, North America and the Middle East. Link

Australian asset owners LGsuper and Qantas Superannuation, the super funds for Queensland local government employees and airline staff respectively, have backed a US$250m Japanese solar investment platform. Japan Solar, just closed by Partners Group and Equis Funds Group, will fund the construction of utility-scale solar power plants across Japan, with the first plants expected to start generating electricity in the second half of 2014. Japan Solar will partner with Nippon Renewable Energy.

Net retail sales for ethical funds in 2013 totalled £207m, according to industry body the Investment Management Association (IMA). The IMA put funds under management in ethical funds at the end of last year at £9bn – 1.2% of total funds under management.The Calvert Social Index fund returned 10.48% for the three months ended December 31, according to a client update. The benchmark Calvert Social Index (CSI) returned 10.79% for the same period (the difference is due to fees and expenses). For the full year 2013, the fund returned 34.30%, while the CSI returned 35.69%.

German fund industry association the BVI has, for the first time, disclosed some figures about the country’s sustainable fund market. Responding to a query from Responsible Investor at its annual news conference, the BVI said that last year, there were 142 sustainable funds in Germany with a volume of €9.5bn. This compares with 135 products in 2012 that had €9.2bn invested in them. The BVI figure compares with the €26bn figure released by the German Sustainable Investment Forum (FNG). By the end of 2014, the FNG aims to issue a “quality label” for sustainable funds sold in Germany after agreeing the relevant criteria with the BVI’s members.

Staying in Germany, asset manager Union Investment has launched a sustainable convertible bond fund for institutional investors like pension funds and churches. “UniInstitutional Global Convertibles Sustainable” excludes banned weapons like cluster bombs, tobacco, pornography, gambling and companies that violate labour or human rights. As far as sovereign bonds are concerned, the fund avoids issuing countries deemed undemocratic or corrupt. Union said the fund was starting with seed money in the double-digit millions.

Indices

The Nigerian Stock Exchange is planning to develop a tradable Corporate Governance Index based on a new Corporate Governance Rating System (CGRS) for listed companies. The exchange also intends to launch a Premium Board comprised of companies that “adhere to the highest corporate governance standards” based on the CGRS ratings. The exchange held a session on the topic with the Convention on Business Integrity (CBi) last month in Lagos. Link

Index firm FTSE Group is reportedly looking at how to recognise new environmental industries in its classification system. The Financial Times quoted FTSE CEO Mark Makepeace as saying it is working with several major clients on the impact of the low carbon economy. “At some stage, these trends become big enough and you want to be able to recognise that,” he told the paper.