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TIAA-CREF launches low carbon mutual fund as demand increases

US giant launches Social Choice Low Carbon Equity Fund

TIAACREF, the New York-based financial services firm, has rolled out two new sustainable mutual funds – one for international equities and one that selects US firms with low carbon emissions – bringing its offering of such funds to four.

TIAACREF is the US’s leading provider of retirement services for the academic, research, medical and cultural sectors. Its asset management arms runs $869bn (€780bn).

In a statement, TIAACREF said the products, called ‘Social Choice International Equity Fund’ and the ‘Social Choice Low Carbon Equity Fund,’ would seek to “achieve competitive returns while promoting broader economic development, positive societal outcomes and a healthier environment.”

The international equity fund’s benchmark is the MSCI EAFE, an index consisting of firms from Europe, Asia and Australia, while the low carbon equity fund’s performance will be compared against that of the broad Russell 3000 index.

Managers of the two new funds are Philip James Campagna and Lei Liao, who will be supported byTIAA-CREF’s team of seven responsible investment specialists. That team is led by Amy O’Brien, Head of Responsible Investment at TIAACREF Asset Management.

According to TIAACREF, companies eligible for selection by the two funds are those that have demonstrated sustainable “leadership in their respective sectors, including impact on stakeholders such as employees, communities, customers, suppliers and the environment.” Specific ESG criteria such as natural resource usage, the effect on climate change and supply chain practices will also apply in the stock selection.

With the additions, TIAACREF’s group of Social Choice products enlarges to four. The other two funds, which have $18bn in assets in vested in them, are the ‘Social Choice Equity Fund’ and the ‘Social Choice Bond Fund.’

“We’re seeing a steady increase in the level of interest in responsible investing as millennials (people who were young adults around 2000) and other investors look to deploy their capital in ways that achieve their financial goals while being consistent with their values,” said O’Brien.