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Responsible Funds, July 26: Hermes’ ESG and SDG funds are highlights for parent Federated

The latest responsible funds news

Hermes funds were among new parent Federated Investors’ top-selling equity offerings in the second quarter, according to a new earnings report. Among the top-selling funds were the Hermes Global Emerging Markets Fund, the Hermes Global Equity ESG Fund and the Hermes SDG Engagement Equity Fund. Federated, which bought a majority stake in Hermes last year, said its total assets under management have now risen to $502.2bn.

Schroders has launched a fund focused on the low carbon transition, targeting global equities in the clean energy space. The Schroder ISF Global Energy Transition fund’s 30 to 50 stock portfolio will take a best-in class approach, centring on the trends of decarbonisation of power generation, the electrification of energy use and increased energy efficiency.

UK investment house M&G has reportedly launched a new ESG focused emerging markets corporate debt fund. The M&G (Lux) Emerging Markets Corporate ESG Bond fund, which uses a three-stage ESG screening process, will be managed by Charles de Quinsonas and supported by head of emerging market debt Claudia Calich. Its benchmark will be the JPM CEMBI Broad Diversified Index.

Amundi is soon to launch an inequalities fund, according to the Financial Times. Full details are yet to emerge, but Amundi reportedly said: “Rising economic inequalities are a significant global socio-economic issue, destabilising western political and social systems, as well as distorting economic growth through isolationism and protectionism. There is a social risk for investors, which has been consistently overlooked over the last decades.”

Almost half of asset owners (46%) see RI integration into hedge funds becoming very important within the next two years, while more than 20% think the practice is already very important, according to a new paper by the Principles for Responsible Investment and Cerulli Associates.BlackRock Asset Management Ireland has launched what it says is Europe’s first ESG money market fund – the euro-denominated Liquid Environmentally Aware Fund (LEAF). Having launched a similar fund in the US in April, the giant asset manager has plans to add sterling and US dollar LEAF MMFs to its Ireland-domiciled offering. The fund will use MSCI data to invest in issuers with above-average environmental and human rights practices, while also carrying out a number of exclusions.

Over a quarter (28%) of the holdings in the BMO Responsible Global Equity Strategy align with SDG8, Decent Work and Economic Growth, according to a new report. This is the second time that BMO Global Asset Management has mapped the strategy’s holdings to the SDGs, extending the analysis this year to cover all 169 SDG sub-targets, which underlie the 17 goals. The new ESG Profile also found that carbon intensity in the portfolio is 38% below the MSCI World benchmark, and average water use is 60% below the benchmark.

SUSI Partners has raised nearly €150m in total for its second energy efficiency fund, after investors committed €103.2m on the fund’s second closing last week. The SUSI Energy Efficiency Fund II (SEEF II), which SUSI says benefits from its predecessor SEEF I’s partnership network, has deployed approximately €30m to date in energy efficiency measures for infrastructure. The fund aims to raise a minimum of €300m and remains open to institutional investors at least until the end of 2019.

Crédit Agricole CIB and Societe Generale CIB have each signed a €300m sustainability-indexed revolving credit facility (RCF) with French electric utility company EDF. The arrangements, which bring EDF’s total sustainability-linked loans to over €5bn, or 45% of its credit lines, incorporate a pricing adjustment based on EDF’s sustainability performance linked to CO2 emissions and energy efficiency.

SPP Fonder (SPP Funds), part of Norway’s Storebrand group, has reported a net flow of SEK 6.4bn (€606m) in the first half of 2019, bringing its assets under management at mid-year to SEK208bn.