Responsible Funds, Oct. 27: Launches from Robeco, UBS, Russell Investments, Red Ribbon

The latest responsible funds news

Robeco says it has launched a new strategy called Robeco QI Emerging Markets Sustainable Active Equities which combines quant investing, emerging markets equities and sustainability investing. The strategy has been developed with sister company RobecoSAM. The Dutch giant said the new offering “aims to offer a significantly better sustainability profile than the benchmark (MSCI Emerging Markets Index), while maintaining the ability to provide alpha in emerging markets”. It aims for a 20% higher score on ESG criteria than the benchmark. The portfolio manager is Wilma de Groot and the Luxembourg-domiciled fund is available to institutional and retail investors and wholesale distributors.

Ethos says its funds are compatible with the 2° scenario. The Swiss pension-backed advisory body submitted its funds to a test organised by the Federal Office for the Environment (FOEN) in collaboration with the 2° Investing Initiative. The results were published on October 23 and found that, in general, Swiss pension funds maintain a significant exposure to fossil fuels. Ethos excludes companies active in coal extraction or coal-fired power plants. Furthermore, in order to reduce the environmental footprint of its funds, Ethos has developed, in addition to its environmental, social and corporate governance analysis (ESG rating), a carbon rating which minimizes the exposure to the biggest emitters of greenhouse gases. The Ethos funds have been open to all investor categories since early this year. Link

UBS Asset Management has launched a new impact fund. The UBS (Lux) Equity SICAV – Global Impact Fund (USD) is an open-ended, actively managed fund that will invest in long- term growth opportunities which aim to generate a positive social and environmental impact, alongside a consistent financial return. It has worked with academics to develop a bespoke methodology that measures the positive impact of equities on issues fundamental to impact investing. The fund will be managed by Bruno Bertocci, Head of the Sustainable Equity Investors team at UBS AM and will adopt a “high-conviction” concentrated portfolio of 40-80 stocks. While its benchmark is the MSCI All-Country World index, up to 25% will be in invested in small and mid-cap companies.

Harvard University reportedly wrote down the value of its natural resources investments by $1.1bn in the last fiscal year. According to a Bloomberg report citing the Ivy League university’s latest annual report, Harvard revalued the portfolio – comprising mostly forestry and agriculture holdings – to $2.9bn from $4bn.Australia: Russell Investments has launched a performance-focused low carbon global shares fund, which it said is in response to “client demand for a sustainable investment solution that supports management of climate-change risk and the transition to a low carbon economy”. Designed with the firm’s proprietary ‘decarbonisation’ investment strategy, the fund comprehensively considers the value and measure of carbon, green energy, and ESG characteristics. “It does all of this while also avoiding the asset, sector and industry biases that can occur with a pure divestment approach,” Russell said. As a global equity strategy, the Russell Investments Low Carbon Global Shares Fund commits to reducing the exposure to carbon footprint and carbon reserves (fossil fuels) by 50% of its MSCI ACWI benchmark. GuildSuper, Child Care Super and GuildPension are some of the first clients committing assets to the new fund, it added.

Rathbone Greenbank Investments, the specialist ethical and sustainable investment team within Rathbone Investment Management, says its funds under management have exceeded £1bn (€1.1bn) for the first time as ethical investing becomes more popular. “What was once seen as niche has now become mainstream,” said John David, Head of Rathbone Greenbank Investments. Rathhone IM manages more than £37.5bn and is itself part of the London-listed Rathbone Brothers.

MSCI says its MSCI ESG Fund Metrics, provided by MSCI ESG Research, is now available on 10 market data platforms globally. It said it would “help financial advisors and wealth managers provide their clients with environmental, social and governance (ESG) portfolio transparency”. MSCI ESG Fund Metrics aims to provide insight into the overall ESG quality of mutual fund and exchange-traded fund (ETFs) holdings. The scores and metrics are derived from MSCI ESG Ratings.

Two new sustainability investment funds have been launched London-based Red Ribbon Asset Management. The Red Ribbon Private Equity Fund and the Red Ribbon Real Estate Fund will restrict investment to ventures whose commercial objectives conform to the firm’s ‘Mainstream Impact Investment’ criteria. They are: businesses with strong growth potential who not only create value for society but also strive to reduce their environmental footprint.

Thirty mostly Canadian financial institutions and pension funds are calling on Canadian companies to disclose their exposure to climate change risks. The groups, which includes Finance Montréal, Desjardins, Caisse de dépôt et placement du Québec and the British Columbia Investment Management Corporation, plan to help listed firms mitigate their climate change risks. The joint Declaration of Institutional Investors on Climate-Related Financial Risks identifies investments in companies that promote energy transition and that have low emissions.