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Schroders preps ESG multi-asset fund in Singapore

The fund also aims to provide an income of 3-5% per annum.

Schroders has filed an application with the Monetary Authority of Singapore (MAS) to launch a multi-asset fund that integrates ESG factors, according to the regulator’s records.

Once approved, the Schroder International Selection Fund (ISF) Sustainable Multi-Asset Income Fund will be available to retail investors in the Lion City. The fund is not yet available to accredited investors in Singapore as a restricted scheme, MAS records show. The fund is relatively new, having incepted in January, according to Bloomberg data.

FSA sought more information from Schroders, but the firm declined to provide further details as the product is still under regulatory review.

The fund’s investment process integrates ESG factors, according to its prospectus. “This means issues such as climate change, environmental performance, labour standards or board composition that could impact a company’s value may be considered in the assessment of companies,” it said.

The firm believes that “companies demonstrating positive sustainability characteristics, such as managing the business for the long-term, recognising its responsibilities to its customers, employees and suppliers, and respecting the environment, are better placed to maintain their growth and returns over the long-term”, it added.

The fund also excludes companies engaged in prohibited activities, such as companies involved in thermal coal extraction and production, alcohol, tobacco, gambling, weapons and adult entertainment, according to a separate Schroders document.

Of the $662bn that the firm managed as of the end 2019, $397bn integrates ESG considerations and $3.4bn are sustainable assets, the document added.

Besides the fund’s ESG characteristics, the mixed-asset product also aims to provide an income of 3-5%. It also has “a risk profile comparable to a portfolio of 30% equities and 70% fixed income”, according to the prospectus.

Schroders already manages a similar non-ESG multi-asset product, the Schroder ISF Global Multi-Asset Income Fund, which was launched in 2012, with a targeted income of 5% per annum, according to its fund factsheet.

The firm also manages another ESG product, the Schroder ISF Global Sustainable Growth Fund, which was launched in 2010 and is available to both investors in Hong Kong and Singapore, according to FE Fundinfo data.

Other firms that are preparing ESG funds in Singapore this year include Mirova, a Natixis Investment Managers affiliate, and Fidelity.

Separately, the MAS is also encouraging firms to launch ESG and sustainable products in the Lion City.

“Asset managers should seize this opportunity to launch robust green and sustainable focused fund strategies, in anticipation of rising demand from investors in a post-Covid-19 world,”  Jacqueline Loh, deputy managing director at the MAS, said in a keynote speech during the Asian Venture Philanthropy Network Virtual Conference in Singapore.

Part of the Mark Allen Group.