Posted inNews

Ninety One launches environment fund in Singapore

Its mandate is to invest in companies which contribute to positive environmental change through sustainable decarbonisation.
Concept of sustainable energy solution in beautifull sunset backlight. Frameless solar panels, battery energy storage facility, wind turbines and big city with skycrapers in background. 3d rendering.

On Monday, the $485m Ninety One Global Environment Fund received approval from the Monetary Authority of Singapore for sale to retail investors in the Lion City.

“The fund favours companies operating in services, infrastructures, technologies and resources related to environmental sustainability,” said a spokesman.

The Luxembourg-domiciled product was launched in Europe in February 2019, according to FE Fundinfo.

It has posted a cumulative return of 82.3%, compared with a 34.1% average return for its ethical fund peers and 33.8% by the MSCI ACWI, with most of the outperformance occurring since June 2020, according to FE Fundinfo data.

Last June, Ninety One received approval from the Securities and Futures Commission to sell the fund to retail investors in Hong Kong. It is also listed as one of the regulator’s approved green and ESG funds, according to the regulator’s website.

A recent survey by Boston-based research firm Cerulli found that demand for ESG products in Asia Pacific is rising, and that asset managers are planning to promote ESG fund strategies to distributors over the next two years.

All the companies in the Ninety One fund are exposed to at least one of three themes: renewable energy (e.g. solar energy), electrification (e.g. electric vehicles) and resource efficiency (e.g. energy efficient appliances), which are meant to contribute to a lower-carbon economy, according to the spokesman.

Around 30% of the fund’s portfolio is allocated to the US, a similar amount to Europe (excluding the UK) and 24% to emerging markets. By sector, industrials, information technology and utilities make up about 90% of the fund, the most recent factsheet (30 November 2020) shows.

The portfolio is highly concentrated with only 25 individual stocks, and the top 10 holdings comprising 54% of the assets, according to the factsheet.

These include Vestas Wind Systems, Waste Management Inc., Nextera Energy, Xinyi Solar Holdings and Iberdrola SA.

Ninety One Global Environment Fund characteristics:

Source: Fund factsheet, 30 November 2020

The fund is managed by Deirdre Cooper and Graeme Baker, who have respectively 15 and 10 years of experience in the clean technology, energy and environment sector.

The managers take a bottom-up approach to invest in companies with structural growth, sustainable returns and competitive advantages in decarbonisation.

“We have developed a proprietary screening methodology identifying companies that will benefit from moves towards decarbonisation based on environmental revenues and improving carbon data,” said Cooper in a statement.

“Combined with a detailed fundamental research process and our integrated ESG research methodology, the result is a highly concentrated portfolio which allows us to actively engage with every single company we invest in,” she added.

Ninety One manages about $153.8bn in assets (as at 30 September 2020), according to the firm, which demerged from Investec Group last year.

GSAM thematic products

Also this week, Goldman Sachs Asset Management (GSAM) announced it has launched five new thematic investment funds for retail investors in Singapore after receiving approval from the MAS.

The funds, previously available only to private banking and institutional investors in Singapore, span both equity and fixed income strategies, with two having explicit ESG or environmental investment mandates: the Goldman Sachs ESG-Enhanced Global Income Bond Portfolio, and Goldman Sachs Global Environmental Impact Equity Portfolio.

“There are secular demand trends underpinning the increased economic viability of environmentally sustainable solutions,” said Jonathan Tung, co-head of fundamental equity client portfolio management in Asia Pacific at GSAM, in a statement.

“By incorporating ESG analysis to isolate businesses with ESG issues and unattractive fundamentals, we believe this approach can contribute to long-term performance,” added Salman Niaz, senior portfolio manager and head of Asian credit at GSAM.

The other three funds newly available to Singapore retail investors are the Goldman Sachs Global Future Technology Leaders Equity Portfolio, Goldman Sachs Global Future Health Care Equity Portfolio and Goldman Sachs Asia High Yield Bond Portfolio.

GSAM now has a total stable of 27 retail-registered funds in the Lion City.

Comparative performance of the Ninety One Global Environment Fund

Source: FE Fundinfo. Cumulative returns in US dollars

Part of the Mark Allen Group.