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Principal unveils two Hong Kong ESG funds

The locally-domiciled funds are also available to mainland China investors under wealth management connect.
Photo of a tobacco farm in North West India that had just been watered.

Principal (Hong Kong) has announced the launch of the Principal Sustainable Asian Income Fund and the upcoming Principal Sustainable Asian Allocation Fund under its Principal Prosperity Series.

The products are authorised for sale to retail investors by the Securities and Futures Commission and are placed on its “list of green and ESG funds”.

The Principal Sustainable Asian Income Fund was launched on 15 December 2021, its investment managers are Howe Chung Wan and Prakash Gopalakrishnan and base currency is US dollar. The fund’s ongoing charges over a year is 1.22%, management fees are 0.90%.

“Enhancing retirement protection with potential regular dividend paying investment products may help sustain the living standards of retirees enabling them to feel more financially secure,” Derek Ching, chief executive of Principal Investment & Retirement Services Limited, said in a statement.

The new funds aim to provide capital growth and income over the medium- to long-term by investing in Asia Pacific companies that are ESG Leaders. They use a “best-in-class strategy’with the portfolio being 100% ESG screened.

Principal will assign ESG scorings on potential companies/issuers by using a proprietary ESG methodology. Companies/issuers which are in the first or second quartile within their respective sectors based on ESG scores as ranked by the manager’s internal rating system, or have a minimum MSCI ESG rating of BBB will be considered to be ESG leaders.

“Sustainable investing is becoming a more important consideration for investors. Our new funds are Asian focused ESG funds with 100% ESG screening. Investing in ESG does not mean that investors need to sacrifice investment returns,” said Ching. 

The funds are also available to Greater Bay Area (GBA) mainland residents.

Offered through the southbound channel of the GBA’s wealth management connect scheme, the funds come with different share classes, which include income plus class units that target higher potential monthly yields for those investors trying to match desired income levels.  

“By introducing the new ESG income funds, we strive to bring more diversified products for our clients to generate possible passive income and help them achieve their financial goals. At the same time, we help them align their investments with the environmental and social values they’re concerned with.” Ching added.  

Part of the Mark Allen Group.