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NNIP joins ESG parade with China partner

After three-months in the market during the spread of the coronavirus, an ESG fund from NN Investment Partners and China Asset Management has been announced.

The NN (L) International China A-Share Equity Fund debuted at the end of March in Europe during the acceleration of the coronavirus pandemic, when economic activity was shutting down worldwide.

After the extreme market volatility, curtailment of business activity and investor caution began to show signs of easing, the firms last week released a statement announcing the launch of the fund.

“Due to the covid-19 crisis, we focused our efforts on communications to clients with all the necessary market information needed to address this unprecedented event,” said Gopi Mirchandani, CEO at NN IP Singapore. “The fund was thus announced only in May.”

Selected share classes of the fund are registered for sale in Luxembourg and the Netherlands and the two firms are looking at more markets, she added.

In Asia it is available to professional investors only.

The A-share focused product invests in mainland companies and incorporates ESG criteria into the investment process, according to the statement.  It tracks the MSCI China A Onshore Index and the top ten holdings include Tencent (7.91%), Kweichow Moutai (7.68%) and Ping An insurance Group (5.9%). Consumer staples and consumer discretionary sectors together make up about 35% of the portfolio.

NNIP’s role is to provide oversight and advice on ESG integration. China AMC is responsible for generating investment ideas and on-the-ground ESG engagement efforts with investee companies, the statement said.

“We have together established a joint responsible investing council, which will provide guidance on the construction of an eligible investment universe for the fund, implement standards for ESG integration, and monitor global developments in responsible investment,” Mirchandani said.

“We see that portfolios with robust ESG integration are more resilient and have outperformed general market indices, particularly during this pandemic crisis.”

NNIP will market and distribute the fund to its investor base, she added.

The fund launch comes after the two firms signed a Memorandum of Understanding (MoU) April 2018. At the time, they revealed plans to jointly launch ESG products.

Part of the Mark Allen Group.