This update provides an overview of the M&G (ACS) BlackRock US Equity Fund, a bespoke solution developed by M&G Treasury & Investment Office (T&IO) in conjunction with BlackRock.
US BlackRock ESG Optimised Equity Strategy
There are a number of ways to incorporate Environmental, Social and Governance (ESG) into an index enhanced strategy, ranging from simple exclusion policies, to more sophisticated integration approaches. The bespoke strategy we have created, provides both strong ESG benefits and a tracking error to the parent index (S&P 500) that investors would expect.
To achieve this, the fund screens out certain exposures, such as Controversial Weapons, Tobacco, Thermal Coal, Oil Sands, UN Global Compact violators, etc., and reweights the remaining constituents based on a bespoke ESG scoring system. The portfolio is then optimised to ensure a small tracking error to the benchmark, designed for investors who want to screen out controversial business areas, and reward strong ESG stocks, without deviating too far from the risk profile of the traditional market index.