There are two sub-funds now offered within the Amundi Funds Sicav branded as “ESG Improvers”: the Pioneer US Equity ESG Improvers Fund, which can be bought by professional investors in Singapore, and the European Equity ESG Improvers Fund.
“ESG Improvers is a new concept that Amundi has developed which leverages our strength across various teams and locations. It offers investors an opportunity to be part of an actively managed portfolio of tomorrow’s ESG winners,” said Vincent Mortier, the French asset manager’s deputy chief investment officer, in a statement.
Sustainable fund assets in Asia ex-Japan surged to $25.4bn in 2020, up 131% 2020 from a year earlier, according to a Morningstar Global Sustainable Fund Flows report released earlier this month
As much as 40% of assets managed in Singapore incorporate ESG factors, with negative screening and ESG integration the most common strategies, comprising about 66% of those assets, a survey of 972 financial market participants last year by the Monetary Authority of Singapore (MAS) found.
In June 2020, Jacqueline Loh, deputy managing director at the MAS, urged asset managers operating in Singapore to launching more ESG and sustainable funds, and “seize this opportunity to launch robust green and sustainable focused fund strategies, in anticipation of rising demand from investors in a post-Covid-19 world”.
IDENTIFYING POTENTIAL
Amundi’s “ESG Improver” strategy takes a forward-looking approach to identify companies with promising ESG trajectories, and complements the traditional ESG approach which targets ESG winners based on their current ESG profile, according to a spokesman.
The strategy is based on three principles:
First, they exclude companies that are not aligned with Amundi’s ESG framework; second, suitable companies are identified through a fundamental bottom-up investment process which integrates the firm’s proprietary ESG methodology; and third, the managers engage with company management to understand and influence the company’s financial and ESG credentials.
“This fundamental bottom-up concept is designed to offer attractive risk-adjusted returns and to encourage companies to improve the ESG credentials,” said the spokesman.
“The intention is to build a portfolio of concentrated, high conviction holdings,” he added.
The funds are actively managed, with the US product benchmarked against the S&P 500 index and the European product to the MSCI Europe index.
Further funds will be added to the ESG Improvers range, including equity and fixed income strategies, according to the spokesman.
Neither of the two new funds are authorised for sale in Hong Kong, but Amundi’s Green Planet Fund is one of 39 products included in the country’s Securities and Futures Commission’s list of ESG-approved funds that meet disclosure requirements aimed at countering greenwashing.
A subsidiary of the Crédit Agricole group, Amundi manages around €1.65trn ($2trn) of assets, including €345bn in responsible investment assets, according to the statement.
