Invesco, one of the world’s leading asset managers today announces the launch of the Invesco Sustainable Eurozone Equity Fund, which will invest in European companies that the managers believe will thrive through the transition to decarbonise their activities.
The Fund is launching in partnership with UBS Global Wealth Management and will be managed by Invesco’s experienced equity fund managers, Oliver Collin and Steve Smith and supported by the broader European investment team. Invesco believes its experience in active management, fundamental research and engagement with businesses undergoing change reinforces the team’s ability to analyse environmental transition. In addition, the Fund will calculate environmental materiality by using traditional financial metrics to assess a company’s ability to adapt to a low carbon world.
The Fund launches as an Article 8 strategy with the aim of supporting the evolution to a low carbon economy by owning companies that have the ability to reduce emissions by more than the MSCI EMU Index.
Stephanie Butcher, Senior Managing Director & Co–Head of Investments at Invesco says:
“We believe active fund management’s role in reducing carbon emissions is not solely via exclusion. Strategies that only allow investments in environmental perfection today risks starving capital from companies that can be instrumental in reducing carbon globally. The energy transition requires capex, and we believe finding and incentivising companies with the financial ability to fund that transition will unlock the greatest environmental and economic value.
“This new strategy relies on engaging with the large emitters, not excluding them, and through traditional financial analysis will seek to model the materiality and ability for change.”
The active investment management of the Fund includes engagement with management teams to support their analysis and importantly to gauge the company’s willingness to change. Invesco will also measure the reduction in the combined scope 1, 2 and 3 emissions (as measured in tonnes of Co2) of the portfolio and use the same methodology to compare these results to the weighted average emission reduction of the index.
The Fund aims to outperform the benchmark – MSCI EMU Index (Net Total Return) -in the long term, whilst also seeking to reduce carbon emissions by more than the benchmark on a 3-year rolling basis. The Fund will focus on where this potential change is undervalued by the market, therefore linking financial and sustainable objectives. Invesco believes that only by focusing on a combination of financial and sustainable objectives we will affect real, durable change.
Philippe G. Müller, Head CIO Global IM Fund Investment Solutions, UBS Global Wealth Management, says:
“Ongoing volatility and uncertainty in markets have emphasized the importance of diversification across but especially also within asset classes. Through this collaboration, we offer our clients a new fund solution strategy within the sustainable investing universe that focuses on improver companies, an area of the market that has benefited from an increased rotation into value and cyclical strategies.”
The Fund is available to retail and institutional investors and classes of the Fund are registered across a number of European regions.
