Responsible Funds, January 17: BlackRock unveils index fund that excludes tobacco

The latest responsible funds news

BlackRock, the world’s largest asset manager, has launched the BlackRock Developed World ex Tobacco Index Fund to meet demand from organisations in the healthcare sector, charities, medical foundations and pension schemes. The fund assists investors seeking to tailor their socially responsible investment strategies by providing a low cost exposure to global equity markets whilst also excluding stocks in the tobacco and controversial weapons sectors from their portfolios. It’s benchmarked against the MSCI World ex Tobacco ex Controversial Weapons Index.

Deutsche Bank says its Consortium II microfinance fund has taken in $100m (€73.5m) from institutional investors, including French insurance giant Axa, German development bank KfW, US asset manager State Street and Norwegian insurer Storebrand. The bank said that since inception, Consortium II had invested in 30 microfinance institutions (MFIs) in Eastern Europe, Latin America and Asia. The areas that the MFIs are active in include health care, education, energy and agribusiness. One recent example is a $2m loan the recently made to the Indian School Finance Company, which provides funding for primary schools in the country’s poorer areas. Link

German sustainable asset manager Ökoworld says its flagship equity fund Ökoworld Ökovision Classic has taken in €411m in assets, mostly from retail investors. Launched in 1996, Ökovision Classic is a global equity fund that invests in companies Ökoworld deems sustainable. Its biggest exposure is to US stocks (25.1%), followed by those in Brazil (9.3%), Germany (8.2%) and the UK (7.5%). Consumer goods, health care, capital goods and energy are among the sectors the fund overweights. Last year, Ökovision returned 17%, or just under the 19.6% for its benchmark, the MSCI World Index.

ING Investment Management has launched an SRI-driven European equity fund to retail and institutional investors in Europe and Asia. The Luxembourg-domiciled vehicle, ING (L) Invest Europe Sustainable Equity, was launched with €40m in assets under management, in response to increasing client demand. The fund aims to outpace the MSCI Europe Net Index by 2% per year.The SUSI Energy Efficiency Fund, which finances energy saving measures for existing infrastructure, has had a first close at €65m, exceeding the €50m target. Investors included insurance companies, pension funds and large foundations from Germany and Switzerland. The fund, capped at €300m, qualifies as a debt instrument under the European Solvency II regime. Switzerland-based SUSI Partners counts among its directors Moritz Leuenberger, the former Swiss Minister for Energy, and former Deutsche Telekom head Kai-Uwe Ricke.

The UK’s Devon County Council Pension Fund has reportedly committed to investing £40m in Aviva Investors’ Returns Enhancing and Liability Matching (REaLM) strategies. Half has been committed to the REaLM Infrastructure Fund, with the balance going to the REaLM Ground Rents Fund, according to a report in Institutional Asset Manager.

Italy-based private equity firm Ambienta has raised an additional €50m for its second fund which backs companies that seek to curb pollution and conserve resources, according to a Bloomberg report. It cited a company statement saying the cash came from 20 investors including leading Italian and Nordic pension funds.

The European Investment Bank (EIB) is appraising a €25m investment in a vehicle that will invest in energy efficiency projects. The €150m Italian Energy Efficiency Fund may invest and/or partner with ESCOs (Energy Services Companies).

Net retail sales of ethical funds in the UK was £25m in November 2013, according to figures from trade body the Investment Management Association. Funds under management for ethical funds were £9bn, with their share of total funds under management put at 1.2%.

Citing growing client demand for sustainable investments, Commerzbank’s wealth management arm has done a deal with German sustainable rating agency Oekom to source the latter’s ratings of equities and bonds. Commerzbank said it meant it was now in a position to invest only in securities that qualified for Oekom’s ‘Prime Status’ rating.