Singapore-based Endowus has launched ESG advised portfolios, which allows investors to invest in multi-asset sustainable portfolios.
Endowus claims that the digital offering is a first in Asia, according to a press statement. Endowus is open to all Singapore-based investors, excluding US persons.
The firm believes that Singapore’s drive towards sustainable investing is aligned with investor sentiment. An Endowus survey of 1,100 participants in Singapore shows that 93% of the respondents indicated that ESG investing resonates with them. However, only 28% of all surveyed held some form of ESG investments.
Survey findings show there are common themes that explain investors’ hesitation to fully embrace ESG funds. Fifty-eight percent of the respondents acknowledge a lack in their own understanding or knowledge of ESG investing, while 43% pointed to a lack of good available options as a key hindrance.
“The newly launched Endowus ESG portfolios are aimed at addressing these key issues while meeting growing investor interest in investing sustainably and fostering positive change – both of which also support Singapore’s national policy,” the firm said.
Launched in October 2019, Endowus is also the first and only Central Provident Fund (CPF) digital advisor. The firm aims to also include its ESG portfolios in the CPF, allowing users to invest their pension funds in sustainable investments.
Endowus’s ESG portfolios are comprised of actively managed funds (three equity and three fixed income products) and make use of their institutional share classes with 100% trailer fee rebates, facilitating access to ESG products at the lowest achievable cost, according to the firm’s website.
The fund managers include JP Morgan Asset Management, Natixis Investment Managers’s Mirova, Pimco, Schroders and UOB Asset Management-Robeco.
ESG portfolios and funds
A spokesman of the firm claimed the ESG funds in the platform are unique in the region multi-fold:
- Two of the funds are not available on any other platform
- For three of the six funds, Endowus worked with the fund manager to launch the product or a new share class previously unavailable in Singapore
- Endowus has exclusive fees or clean/institutional share class access for four of the six funds
“We have implemented a robust due diligence process on the selection of funds and fund managers, so investors are provided with only the best ESG products,” Samuel Rhee, chief investment officer at Endowus, said in the statement.
When the firm assessed the ESG funds, it looked at the firm-level commitment to ESG investment and integration, as well as how the strategy is designed to incorporate and take advantage of ESG information.
The existing ESG fund managers on Endowus’s platform are all signatories of the UN PRI and were given the highest UN PRI rating A+ in Strategy and Governance in 2020. All of them have at least 20 years of history in their ESG investing journey and are early movers or innovators in different aspects of ESG investing.
“These fund managers have committed their resources to have built proprietary ESG rating systems so they could have independent ESG views and do not depend on external third party ratings. Most of them have a dedicated sustainability investment team that focuses on ESG research and engagement, and provides strong support to the investment team,” the firm writes on its website.
It added that the ESG funds have a clear and repeatable investment process that exclude unethical and irresponsible companies, fully integrate proprietary ESG insights in the bottom-up fundamental analysis, and invest in names that contribute positively to the environment and society. Endowus monitors the sustainability profile of the funds on a regular basis to make sure they are better than the average market.
The firm outlined some of the reasons why it selected the funds. For example, the Schroder ISF Global Climate Change Fund has a “robust investment process focusing on capturing opportunities arising from climate change issues”, while the Pimco GIS Climate Bond Fund provides “diversified exposure to global climate action leaders in fixed income”.
Fund Selector Asiawill be running Spotlight On: ESG on 22 – 25 March and ends with a LIVE event (on the 25th) where we will bring together a panel of fund selectors and the fund managers to discuss their views and join an interactive Q&A session.