Responsible Funds, June 10: John Hancock/Trillium, Amundi, Calvert, ELTIFs, ABN AMRO

The round-up of the latest responsible funds news

John Hancock Investments, the US fund firm that’s part of Canada’s Manulife group, has announced two new funds that integrate environmental, social, and governance (ESG) issues with fundamental stock research. John Hancock ESG All Cap Core Fund and John Hancock ESG Large Cap Core Fund are both managed by SRI firm Trillium Asset Management. “Investors of all ages are now recognizing how ESG funds can play an important role in their portfolios,” said John Hancock CEO Andrew Arnott. The funds will avoid companies with material exposure to agricultural biotechnology, coal mining, hard rock mining, nuclear power, tar sands, tobacco and weapons/firearms. They will not include companies lined with controversies related to animal welfare, the environment, corporate governance, human rights, product safety, or workplace practices. They will be managed by Cheryl Smith, Elizabeth Levy and Stephanie Leighton.

Amundi has become the latest asset manager to launch a green bond fund. The Paris-based firm, which has more than €1 billion of assets under management, launched Amundi Green Bonds I – a €22 million fund dedicated to the asset class. The fund aims to outperform the Barclays/MSCI Green Bond Index, launched in 2014. Norway’s Storebrand currently runs the biggest green bond fund, with more than €200 million under management. Axa, BMO and Mirova are some others with dedicated funds or mandates so far. BlackRock is rumoured to be considering launching a green bond fund this year.

The European Securities and Markets Authority (ESMA) has published its Final Report and draft Regulatory Technical Standards for the European Long-Term Investment Fund Regulation. The ELTIF Regulation allows investors to put money into companies and infrastructure projects for the long term and aims to increase the amount of non-bank finance available for companies investing in the EU’s real economy. The key proposals cover the use of derivatives, investment horizon, market risk and valuation criteria.

Bursa Malaysia, the Kuala Lumpur-based exchange, has announced five new additions to the constituents of the FTSE4Good Bursa Malaysia (“F4GBM”) Index.
The F4GBM Index measures the performance of listed companies demonstrating strong Environmental, Social and Governance (“ESG”) practices and was launched in December 2014 with a total of 24 constituents.

Germany-based asset manager LUXCARA has announced the fifth closing for its third renewable energy fund ‘Solar and Wind’ increasing capital raised to €170m. It is a sub-fund of the partnership FLAVEO Infrastructure Europe SCS SICAVFIS. The fund invests in solar farms and onshore wind farms in Europe and is open exclusively to institutional investors, who are offered subordinate bonds as well as securitisation options and direct investments on subscription to the fund.A new impact fund has been set up by ABN AMRO with Dutch development bank FMO and Amsterdam-based fund manager Privium. The FMO Privium Impact Fund offers ABN AMRO clients, initially of its MeesPierson private bank, the opportunity to co-invest in loans to private sector companies in emerging markets with the FMO. The fund is targeting a return, net of fees, of between 2.5-4% per annum. “In addition to achieving the Target Return, the Fund aims to make socially and environmentally responsible investments, hereby aiming to provide providing investors with an attractive financial return while at the same time endeavouring to create Impact in Developing and Emerging Economies,” its prospectus says. 
Impact will be measured according to the impact methodology as adopted by FMO. Link

Separately, ABN AMRO has emerged as one of the backers of the Netherlands’ first national social impact bond. At present, there are currently five social impact bonds active in the Netherlands, three of which have been financed by ABN AMRO. This new social impact bond has been structured by the Dutch Ministry of Security of Justice to help ex-convicts find employment. It has raised €1.2m, with ABN AMRO investing €426,000.

SRI fund firm Calvert has decided to terminate a sub-advisory agreement with New Amsterdam Partners, the $1.1bn New York-based asset manager headed by US SIF Board Member Michelle Clayman, for the Calvert Capital Accumulation Fund. The fund is focused on mid-cap US firms that “demonstrate positive environmental, social and governance performance”. According to a filing with the SEC, the board of the fund met on June 7 and “approved a resolution to terminate the sub-advisory agreement with New Amsterdam Partners LLC, and to have the fund’s advisor, Calvert Investment Management, Inc., assume day-to-day portfolio management responsibility”. It said: “New Amsterdam Partners LLC will no longer serve as sub-advisor for Calvert Capital Accumulation Fund.” No reason was given for terminating the agreement, which dates back to 2005.

NN Investment Partners, the former ING Investment Management, is considering launching an impact fund, RI understands. The offering, pencilled in for the second half of this year, is in response to client demand and will draw on research NN published earlier this year on the links between various ESG factors and investment performance. The research, in partnership with the European Centre for Corporate Engagement (ECCE) at Maastricht University, evaluated data from more than 3,000 listed companies worldwide. The study challenged the idea that absolute ESG scores are a good indication of what to expect from a company in terms of investment performance.