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Ninety One prepares ESG fund in Hong Kong

The high conviction portfolio is another entry into the growing group of ESG funds.

Ninety One (previously Investec Asset Management) received approval from the Securities and Futures Commission (SFC) last week to launch the Global Environmental Fund to Hong Kong’s retail public, according to the regulator’s records.

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

In Asia, the product is already available to accredited investors in Singapore, according to the Monetary Authority of Singapore.

Co-managed by Deirdre Cooper and Graeme Baker, the fund “invests globally, primarily in companies contributing to or benefiting from positive environmental change”.

According to a Fund Calibre report, the managers developed a screening method that evaluates the levels of carbon dioxide that could be avoided by using one company over an alternative.

“If a company’s total activities generate less carbon emissions than the average company in their sector, it is included in the investable universe,” the report said.

The portfolio is highly concentrated with only 23 equity positions. The top ten holdings account for 56% of the fund and include Nextera Energy (6.9%), auto parts manufacturer Aptiv (6.8%) and Waste Management (6.0%).

Due to the small number of holdings, “the majority of the risk is in stock selection, rather than in sector or country bets,” according to the Fund Calibre report.

The fund is also listed as one of the regulator’s approved green and ESG funds, according to the SFC. The list includes products that meet the regulator’s ESG disclosure requirements aimed at countering greenwashing. To-date, there are 31 products listed on the SFC website.

Ninety One announced the completion of its demerger from Investec Group and the official launch of the Ninety One brand in March this year.

As part of the demerger, Ninety One’s shares have been listed on the London Stock Exchange (LSE) and the Johannesburg Stock Exchange, FSA previously reported.

Ninety One is another fund house attempting to ride the momentum for ESG funds.

In the first quarter, investors poured $45.6bn into sustainable funds globally compared to an outflow of $384.7bn for the overall fund universe, FSA reported earlier.

Most recently, NNIP and China AMC announced an A-share ESG fund.


The Global Environmental Fund vs category average and benchmark since inception

Source: FE Fundinfo. In US dollars.

Part of the Mark Allen Group.