Responsible Funds, July 5: Luxembourg exchange launches responsible investment fund index

The Luxembourg Stock Exchange has launched a new responsible investment fund index called the Lux RI Fund Index. It aims to represent the overall performance of some of the major Grand Duchy-domiciled funds in the area of responsible investment, “primarily those concerned with environmental, social and ethical issues”. It is a closed-basket index with a total of 20 constituents, each with a maximum weighting of 10%. Link

The £339.5m (€394.4m) Kames Ethical Equity Fund returned 3.23% over May compared to 3.26% for its Investment Management Association (IMA) peer group median, according to a fund factsheet. Positive contributors included investment manager Brewin Dolphin, support services firm Paypoint and UK water company Severn Trent. The fund does not hold banks like Standard Chartered, Barclays and Lloyds due to its ethical criteria. The “dark green” fund, managed by Audrey Ryan, returned 34.96% in the year to the end of May.

Long-term funds, all funds excluding money market funds, registered record net inflows of €402bn during the first quarter of this year, up from €263bn in the previous quarter, according to new global statistics from the European Fund and Asset Management Association (EFAMA). “This is the highest level of net inflows ever recorded into long-term funds,” EFAMA said.

A new low-cost veterinary service backed by social investor Bridges Ventures’ Sustainable Growth Fund III has opened for business. ‘The Vet’ has opened its first walk-in clinic in Bristol in the west of England; the investment was led by Bridges Partner and former vet Garret Turley. Net retail sales of ethical funds in the UK were £22m in May with funds under management of £8.5bn (May 2012: £6.9bn), according to the Investment Management Association. Their share of total funds under management was 1.2%, same as this time last year, the IMA added. Link

The New Forests Tropical Asia Forest Fund, which will invest in sustainable plantation forestry in Southeast Asia, has closed with a total of US$170m in commitments. The fund, from PRI signatory fund manager New Forests, will have a primary focus on Malaysia, Indonesia, and Vietnam. It has also completed its first investment, a majority interest in Malaysia’s Hijauan group.

The €533m Pictet Timber Fund, which invests at least two-thirds of its assets in the shares of companies involved in timber and forestry, has returned 38,2% in the year to the end of May, fund documents show. The fund, managed by Gabriel Micheli and Christoph Butz, has its largest positions in Weyerhaeuser Rayonier REIT and Plum Creek Timber.

Aviva Investors’ REaLM (Returns Enhancing and Liability Matching) Infrastructure Fund has acquired a 12.3MW portfolio of residential photovoltaic systems built on 4,000 UK domestic houses from Ecovision Renewable Energy. Terms of the deal weren’t disclosed. REaLM’s objective is to achieve investment returns above long-dated index-linked UK government bonds (gilts).

Quotient Investors, the quant sustainability boutique that is backed by the California Public Employees Retirement System (CalPERS), says its Sustainable Alpha strategy has been awarded the Plan Sponsor Network’s “Top Gun” designation and a No. 1 ranking for the most recent three-year, one-year, and quarter periods ending March 31. The PSN database is one of the largest investment manager databases in the industry.