Responsible Funds, January 26: BlackRock, Solactive, Newton, Pax Ellevate, Mirova, Wealthsimple

The latest responsible funds news.

Blackrock has expanded its Tax Transparent Fund range with the launch of two low carbon and multi-factor index funds, responding to the growing demand from UK pension schemes and insurers for “tax efficient investments” in a pooled structure. The BlackRock ACS Low Carbon Equity Tracker Fund – whose underlying index is the MSCI Low Carbon Target – purportedly offers access to global equity markets while “reducing exposure to carbon emitting companies”. And, the BlackRock ACS World Multifactor Equity Tracker Fund – whose underlying index is the MSCI World Diversified Multi-Factor – offers exposure to four “return-enhancing equity factors”: value, momentum, quality and size. The two new funds launched bolster BlackRock’s existing $40.3bn Tax Transparent Fund range.

Southwark Pension Fund – part of the recently pooled London CIV – has invested in the BlackRock ACS Low Carbon Equity Tracker Fund, IPE reports. Duncan Whitfield, Strategic Director of Finance and Governance at the London fund is quoted as saying: “Southwark recognises the importance of responsible investing and is fully committed to the continued reduction in fossil fuels exposure. Our investment in the BlackRock ACS World Low Carbon Equity Tracker Fund exemplifies this commitment and our focus on generating a positive long-term sustainable impact”.

German index provider Solactive has launched a new European sustainability index with compatriot bank Deutsche and UK based provider of “self-learning” ESG quant models, Arabesque. The index – which is claimed to be the first of its kind – uses machine-learning and algorithm- based technology to rate companies on the principles of the United Nations Global Compact: Human Rights, Labour Rights, the Environment, and Anti-Corruption (GC Score).

Mirova, the responsible investment arm of Natixis, has announced the acquisition of two motorways in Portugal, acquiring stakes of 23.8% and 35.2%, respectively, in Madeira’s ViaExpresso and ViaLitoral. This is the first deal that has been closed in Portugal by Mirova Core Infrastructure Sarl, a company fully owned by the Mirova Core Infrastructure Fund – the €700m fund dedicated to brownfield private public partnerships (PPP) in Continental Europe.

The Administrative Council of the Council of Europe Development Bank (CEB) approved six new loans worth almost €635m. They include a €290m loan in the Netherlands to the National Energy Saving Fund Foundation (NEF) to finance energy efficiency improvements to residential properties. The built environment accounts for 30% of the country’s total energy consumption, so the programme financed by the CEB will contribute to the Dutch government’s target for energy savings.The UK’s Environment Agency Pension Fund (EAPF) – part of the recently pooled Brunel Pension Partnership – has invested £150m of its £3.5bn assets in a new low carbon, tax transparent fund launched by international asset manager, Robeco, according to reports. Robeco’s quant sustainable fund is the first available under its newly launched authorised contractual scheme (ACS) structure. An ACS is a UK-pooled fund structure offering tax benefits for institutional investors.

Newton Investment Management, the London-based subsidiary of BNY Mellon, has unveiled a sustainable global equity fund for UK institutional investors. The Newton Sustainable Global Equity Fund, managed by Terry Coles, is a concentrated global portfolio of 50 stocks or fewer, which subjects all holdings to an ESG quality review, including: avoidance of companies with material and unresolvable ESG-related risks; no direct investment in any company deriving more than 10% of its turnover from the production and sale of tobacco; and active exercise of voting rights and engagement plans for investee companies. The fund seeks to outperform the MSCI AC World (NDR) Index over a rolling five-year period.

Pax Ellevate Management, the US ‘gender lens investing pioneer’, has announced that its Global Women’s Index Fund has outperformed its benchmark, the MSCI World Index for the calendar year 2017. Its institutional class shares returned 25.1% and its individual class shares returned 24.9%, outpacing the MSCI World Index return of 22.4%. The Fund invests in the Pax Global Women’s Leadership Index, the first index to rate companies based on their advancement of women into senior positions.

Canadian asset manager Wealthsimple has reportedly launched a suite of Socially responsible investing portfolios in the UK. The digital wealth manager, which manages £1bn on behalf of 50,000 clients globally, will charge management fees of between 0.5% to 0.7%. for its SRI portfolios. UK investors can sign up for a Wealthsimple SRI portfolio, with a minimum of £5,000 invested.

German investment manager Union Investment has reportedly launched a Sustainable Development Goals (SDGs) themed fund focused on water management, healthcare, renewable energies, and green transport. The UniInstitutional SDG Equities fund will have an investment universe of 1,200 companies, with 60 companies being included in the final portfolio. Portfolio Manager, Jörg Schneider will manage the new strategy.