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Morgan Stanley IM launches ESG mixed-asset fund

The product is an addition to the firm's other ESG offerings.

Morgan Stanley Investment Management has launched an ESG mixed-asset product, according to a statement from the firm.

The Global Balanced Sustainable Fund is available to professional investors in Hong Kong and will be available to accredited investors in Singapore in the coming weeks, a Hong Kong-based spokeswoman for the firm told FSA. The firm does not have plans yet to bring the new product to retail investors in both jurisdictions, however.

The new product adds to the other ESG funds that the firm is managing, which include the Global Balanced Fund, the Global Sustain Fund and the Global Balanced Defensive Fund, she added.

However, the new product has a more “progressive” ESG integration approach.

“Our existing ESG portfolios incorporate restriction screening and ESG integration. The newly launched fund is an extension of this approach, with an enhanced restriction screening policy, a more progressive ESG integration approach, such as explicitly aiming to support the low carbon transition, and a new component, which are impact investments, both in equities and bonds,” she explained.

Led by Andrew Harmstone, head of the global balanced risk control strategy, the Luxembourg-domiciled fund will allocate to global equity and fixed income securities, including impact equities and green bonds, as well as money market instruments and cash, according to the statement.

As part of its ESG mandate, the portfolio team will also engage with selected companies through dialogue and proxy voting. It is expected that 5% to 30% of assets will be invested in companies that explicitly aim for positive environmental and social outcomes, the statement added.

“We have seen increasing demand for ESG globally. Investors are seeking higher-conviction approaches, managers who genuinely contribute to solutions to the world’s environmental and social challenges, whilst also providing attractive risk-adjusted returns,” the spokeswoman said.

Morgan Stanley IM had assets of $584bn as of the end of March this year.

Other asset and wealth managers have noted the increasing trend toward ESG portfolios in Asia, including UBP, Natixis Investment Managers, UBS Wealth and Fidelity.

Moreover, Asia’s ESG funds have attracted assets of nearly $1bn in the first quarter, FSA previously reported.

Separately, other asset managers that have recently launched ESG funds include NN Investment Partners and China Asset Management. Ninety One also received approval from the Securities and Futures Commission (SFC) last month to launch the Global Environment Fund.

Part of the Mark Allen Group.