Posted inESG

RHB partners JPM to launch climate fund in Malaysia

The underlying product uses artificial intelligence (AI) to guide stock selection.
Top of Petronas Twin Towers. Aerial view of Kuala Lumpur Downtown, Malaysia. Financial district and business centers in smart urban city in Asia. Skyscraper and high-rise buildings at sunset.

RHB Asset Management (RHBAM) has set up a feeder fund to invest in JP Morgan Asset Management’s (JPMAM) Climate Change Solutions Fund. The Luxembourg-domiciled Sicav product was incepted in December 2021, and has assets of about $100m.

The RHB Climate Change Solutions Fund is designed with “diversified exposure to climate change solutions” and aims to provide long-term capital growth by investing in the US dollar denominated shares of the JPM underlying fund, which focuses on ESG through themes such as sustainable transport, construction, food and water, recycling and re-use, and renewable energy, according to a media release.

“The RHB Climate Change Solutions Fund [allows] us to further expand our sustainable product offerings while amplifying our efforts in promoting sustainable investing. This latest addition to our suite of Sustainable and Responsible Investment (SRI) fund offerings is targeted to achieve RM100 million AUM within six months from its launch,” said Eliza Ong, managing director of RHBAM.

The JPM fund is managed by Francesco Conte, Yazann Romahi and Sara Bellenda, who use an AI tool called “ThemeBot” that deploys natural language processing to determine textual relevance and revenue attribution to identify companies exposed to the theme of climate change solutions and its related sub-themes.

“We believe strategies such as this help investors intelligently capture innovative investment opportunities and technologies facilitating Climate Change Solutions,” said Sherene Ban, CEO of Singapore and Southeast Asia, at JPMAM.

The fund has a 47% weighting to North America and a 39% weighting to Europe (excluding the UK) and the Middle East, according to its most recent factsheet. Industrial stocks comprise 60% and IT shares 12% of the portfolio. Top five holdings include Carrier Global, Johnson Controls International, Schneider Electric, Evoqua Water Technologies  and Trane Technologies.

The fund taps into a global sustainable asset market worth about $35.3trn, according to the Global Sustainable Investment Alliance, an international group made up of sustainable investment organisations.

The RHB Banking Group, owners of RHBAM, established its RHB Sustainability Framework in 2019, which outlines and embeds sustainable practices into its business and operations in line with its sustainability vision of “Building a Sustainable Future”.

RHBAM has three existing ESG SRI-qualified funds with a combined AUM of around MYR800m ($192m): the RHB i-Global Sustainable Disruptors Fund which is a Shariah-compliant fund, the RHB Global Impact Fund and the RHB Sustainable Global Thematic Fund.

Part of the Mark Allen Group.