M&G Investments, one of the leading international asset managers, announces today the launch of a UK-domiciled multi-asset fund incorporating environmental, social and governance (ESG) factors and investing in companies that aim to have a positive societal impact, whilst providing sustainable investments returns.
The M&G Sustainable Multi Asset Fund is managed by Maria Municchi and supported by deputy fund manager Steven Andrew.
The fund invests in a diversified range of asset classes from anywhere in the world including emerging markets (net allocation ranges: 20-80% in fixed income, 20-60% in equities and 0-20% in other assets) and will apply M&G’s well established multi-asset philosophy, using dynamic asset allocation and an assessment of behavioural factors to identify those assets that present the most attractive opportunities aiming to provide a total return* of 4 to 8% per annum over any five-year period. Asset allocation is the main driver of returns in the fund.
The fund uses an ESG approach with quantitative screening to ensure holdings exhibit high standards of ESG. Municchi will identify holdings to be added to the portfolio by:
- Screening out companies that are in breach of United Nations Global Compact Principles and that derive their revenue from specific sectors: tobacco, alcohol, adult entertainment, gambling, thermal coal, defence and weapons**
- Using proprietary internal, and third-party, screening of ESG-rated companies
Additionally, the M&G Sustainable Multi Asset Fund will have a core holding of impact assets which will constitute on average around 20% of the portfolio. These assets are considered to have a positive societal impact with a focus on the United Nations Sustainable Development Goals.
As part of M&G’s Positive Impact team, Municchi will work with colleagues from across the business to identify a watchlist of potential impact investments. The impact assets may be from all listed asset classes including equities, green and social bonds, infrastructure or specialty funds.
Maria Municchi, M&G Sustainable Allocation Fund manager said, “Financial returns should remain the foremost objective of investing, but the way in which we choose to invest can make a difference beyond just those returns. Some of the biggest challenges the world is facing, from climate change to population growth, from corruption to pollution, need addressing urgently. By considering how your investments might affect society and the environment, you can choose to contribute towards a sustainable future.”
Andrew Watson, Head of UK Wholesale Sales at M&G Investments, says: “The M&G Sustainable Multi Asset Fund offers investors a unique proposition; a flexible multi-asset portfolio using the asset allocation expertise of M&G’s multi-asset team, coupled with a sophisticated ESG approach for a sustainable outcome.
“We are actively expanding our range of ESG-focused investment strategies to meet the growing demand for funds that offer strong returns, whilst allowing clients to align their investments more closely to their environmental and social values. Multi-asset offers a unique risk/return proposition and is ideally-suited to a dynamic ESG fund where sustainability and positive impact investing are key features.”
A Luxembourg-domiciled version of the Fund, aimed at investors based outside the UK, was launched on 6 December 2018.
*The combination of capital growth and income
** The fund will filter out companies that derive more than 5% of their revenues for producers, or 10% of their revenues for distributors, from the following sectors: tobacco, alcohol, adult entertainment, gambling or thermal coal. In addition, and on a best effort basis, subject to source information, companies that derive any revenue from defence and weapons are excluded