Which Funds Launched in November

ESG investors will be pleased to see a plethora of new sustainable offerings, among the fund launches of November 

Annalisa Esposito 7 December, 2020 | 9:16AM
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November was an exceptionally busy month for fund houses. According to Morningstar Direct data, 19 new open-ended funds were launched during the month. And ESG investors will be happy to see that many of the new offerings have a sustainable remit.

As the Covid crisis put environmental, social and governance matters into the spotlight, sustainable funds have increased in popularity over the last year. Assets in sustainable funds more than doubled to $54.6 billion over the second quarter of 2020 and impact funds are particularly attracting younger investors.

Sustainable Fund Launches

Aberdeen Standard Investments (ASI) launched a MyFolio Sustainable Fund range of five risk-graded products in November; the fund-of-funds suite will be managed by Joe Wiggins, head of portfolio management, and senior investment analyst Matthew Wiles. 

Their objective is to identify funds where managers are focused on companies that "treat people and the planet well" and meet with companies to understand their governance procedures, as well as avoiding certain companies such as manufacturers of controversial weapons, tobacco, thermal coal producers, and those that fail to meet the UN standards on human rights, labour, environment and anti-corruption.

Wiggins says: "Our tried-and-tested strategic asset allocation process provides a solid foundation from which we can deliver strong returns to investors seeking a sustainable approach in their investment choice.” The firm also launched a passive sustainable option, the ASI Sustainable Index World Equity

Fund Morningstar Category
ASI MyFolio Sustainable I  GBP Cautious Allocation
ASI MyFolio Sustainable II GBP Moderately Cautious Allocation
ASI MyFolio Sustainable III GBP Moderate Allocation
ASI MyFolio Sustainable IV GBP Moderately Adventurous Allocation
ASI MyFolio Sustainable V  GBP Adventurous Allocation
ASI Sustainable Index World Equity Global Large-Cap Blend Equity
Aviva Investors Multi-asset Core I GBP Cautious Allocation
Aviva Investors Multi-asset Core II GBP Moderate Allocation
Aviva Investors Multi-asset Core III GBP Moderately Adventurous Allocation
Aviva Investors Multi-asset Core IV GBP Moderately Adventurous Allocation
Aviva Investors Multi-asset Core V GBP Adventurous Allocation
Close Sustainable Balanced Portfolio GBP Moderately Adventurous Allocation
iShares Dev World FossilFuel Scrnd Eq Global Large-Cap Blend Equity
M&G Climate Solutions Sector Equity Ecology
TB Whitman UK Small Cap Growth UK Small-Cap Equity
TM RWC Global Equity Income Global Equity Income
VT AJ Bell Responsible Growth GBP Adventurous Allocation
VT Downing Eurp Unconstrained Inc Europe ex-UK Equity
VT Elston Multi-Asset Income GBP Flexible Allocation
VT RM Global Real Opportunities Other Equity

Aviva Investors also launched a new range in the month; the MAF (Multi-Asset Fund) Core range consists of five risk-targeted multi-asset funds investing across asset classes globally. The new funds use ESG-optimised strategies utilising Aviva Investors’ ESG scoring system and seek to deliver value for money with a fixed ongoing charge of 0.15%

Sunil Krishnan, head of Multi Asset Funds at Aviva Investors, says: “Investors today are clearer than ever that they want to invest with ESG principles in mind, but it has not always been possible to invest sustainably while keeping costs down. We set ourselves the challenge of creating a multi-asset proposition that allows investors to do both and we believe that the new MAF Core range achieves just that.”

Two funds in particular stand out in the environmental space: iShares Developed World Fossil Fuel Screened Equity Index and M&G Climate Solutions. While the index created by Blackrock (iShares) screens out companies directly involved in fossil fuel extraction, production and exploration as well as those owning fossil fuel reserves, the M&G fund is a concentrated option, targeting opportunities across clean energy and green technology.

M&G’s manager Randeep Somel says: "The green agenda and the need to provide solutions to the challenge of climate change has unlocked the creativity and ingenuity of many companies who have these solutions at the heart of what they do. This is a multi-decade opportunity for companies who deliver innovative products and services – and for those who invest in them.”

Morningstar ESG Commitment Level

Investors looking for more established alternatives in the ESG space can use the new Morningstar ESG Commitment Level, a new tool that identifies the best-in-class funds in the context of ESG investing, while highlighting those which are subpar in their approach to ESG investing.

A fund that has a high commitment level and has also a strong Analyst Rating, for example, is Royal London Sustainable Diversified. This Bronze-rated fund has produced an annualised return of 10% over the past three years, which means is ahead its Morningstar Category Average by 7 percentage points.

Morningstar analyst Rajesh Yadav praises its two fund managers Mike Fox and Shalin Shah, who are supported by an experienced and respected team that is well-versed in the sustainable lens employed here. He says: “Despite its socially responsible objectives that limit its exposure to certain sectors and companies, the strategy has had good success within the GBP moderate allocation Morningstar Category.”

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Annalisa Esposito  is a data journalist for Morningstar.co.uk