M&G Investments today announces the launch of an equity fund investing in sustainable companies that aims to have a positive societal impact through addressing the world’s major social and environmental challenges, whilst providing attractive investment returns.
The M&G Positive Impact Fund is managed by John William Olsen, with Ben Constable-Maxwell, Head of Sustainable and Impact Investing at M&G, taking the lead on the fund’s impact assessment, measurement and Environmental, Social and Governance (ESG) characteristics.
The fund will invest in a broad range of companies, including those in emerging markets, that focus on having a positive societal and environmental impact and will aim to deliver a higher total return* than the MSCI All Countries World Index over any five-year period. It is a concentrated portfolio holding up to 40 companies.
The M&G Positive Impact Fund will focus on the impact of companies whose aim is to address a societal issue. In this context, the traditional definition of ‘Impact’ has been expanded from the impact that investment would have on a business, to the impact of the company on society at large.
The fund is diversified around six main impact areas: climate solutions, clean air, water and land, the circular economy, better health, work conditions and social equality. Across these areas, the fund invests in three types of impactful companies: ‘pioneers’, ‘enablers’ and ‘leaders’.
Olsen and Constable-Maxwell are supported by M&G’s Positive Impact Management team who produce research and define the fund’s investable universe by reaching consensus on the impact of all potential investments. The team screens investments by undertaking a 3-point analysis covering the investment case, intentions and impact of each company. This framework is a practical means of scoring candidate companies for the fund, and creating a watch-list of high quality, sustainable companies for the manager to choose from when the timing and opportunity are right. The fund embraces the United Nations Sustainable Development Goals (SDG) framework.
John William Olsen, M&G Positive Impact Fund manager said, “Our investment process means we’re constantly researching and measuring the impact of the companies in which we’re investing, as opposed to applying a static screen. It’s more labour intensive, because each investment must undergo a thorough Impact analysis and get the full agreement of the team, but we will not compromise on the impact element of our proposition.”
Graham Mason, Chief Investment Officer for M&G equity, multi-asset and retail fixed interest said, “Impact investing is important to us, and our customers. With the launch of this fund, impact investing is now more accessible to a wider base of our customers, and those looking for access to companies making a positive difference, either to society or the environment in which they operate, while aiming to deliver excellent investment performance.”
*The combination of capital growth and income