abrdn today announces the launch of a new investment strategy that is designed to address some of the key concerns of investors who want a greater focus on responsible and sustainable issues, including climate change, without sacrificing returns.
The Responsible Global Asset Strategies (RGAS) Fund predominantly invests in companies and issuers, including sovereigns, that promote Environmental, Social and Governance (ESG) characteristics. It comprises 20 to 30 investment strategies that span geographies and asset classes.
RGAS targets a return in excess of 5% over cash and a volatility of 4-8% p.a. over three-year periods. As an EU SFDR article 8 fund, RGAS aims to achieve this while avoiding those companies and countries it views as having high or poorly managed ESG risks.
The managers of the Fund are Katy Forbes, Gerry Fowler and Catie Wearmouth of the Multi-Asset Solutions team. They implement abrdn’s established Absolute Return approach whilst using a combination of ESG integration, screening and enhancement criteria, together with responsible stewardship, to achieve the Fund’s sustainable and financial objectives.
ESG integration incorporates an assessment of ESG factors into the investment analysis and decision making across all holdings of the Fund. Exclusions mean that the team avoids investing in activities that present particular risks such as controversial weapons or companies engaged in coal extraction or power generation using coal. The team aims to enhance the ESG characteristics of the companies and corporate bonds it invests in by avoiding the lowest rated companies in the riskiest sectors. They also avoid the lowest-rated sovereigns. Currently this means that the Fund would not invest in the sovereign bonds or currencies of China, Turkey or India.
To assess ESG risk, the team uses abrdn’s proprietary ESG House Score developed by its central ESG investment team to assess companies in terms of their responsibility and environmental sustainability. The team ranks countries according to ESG and political factors and excludes those with the highest risk.
For its core global equity allocation, the Fund targets a 50% reduction in weighted average carbon intensity compared to passive global equities.
Katy Forbes, Head of Absolute Return, abrdn said: “We think that it is possible to invest responsibly without sacrificing returns. We aim to identify opportunities which offer attractive returns and that we believe are responsible.”
Justin Simler, Global Head of Multi-Asset Strategy and Specialists, abrdn (pictured) said: “We believe that investors increasingly care much more about how their money is invested and want to understand and manage the risks more effectively. This new strategy broadens our responsible/sustainable range and complements our newly launched Multi Asset Climate funds.”
