abrdn today announces the launch of a new investment strategy that is designed to address some of the key concerns of investors who want a greater focus on responsible and sustainable issues, including climate change, without sacrificing returns.
The Responsible Global Asset Strategies (RGAS) Fund predominantly invests in companies and issuers, including sovereigns, that promote Environmental, Social and Governance (ESG) characteristics. It comprises 20 to 30 investment strategies that span geographies and asset classes.
RGAS targets a return in excess of 5% over cash1 and a volatility of 4-8% p.a. over three-year periods. As an EU SFDR article 8 fund2, RGAS aims to achieve this while avoiding those companies and countries it views as having high or poorly managed ESG risks.
The managers of the Fund are Katy Forbes, Gerry Fowler and Catie Wearmouth of the Multi-Asset Solutions team. They implement abrdn’s established Absolute Return approach whilst using a combination of ESG integration, screening and enhancement criteria, together with responsible stewardship, to achieve the Fund’s sustainable and financial objectives.
ESG integration incorporates an assessment of ESG factors into the investment analysis and decision making across all holdings of the Fund. Exclusions mean that the team avoids investing in activities that present particular risks such as controversial weapons or companies engaged in coal extraction or power generation using coal. The team aims to enhance the ESG characteristics of the companies and corporate bonds it invests in by avoiding the lowest rated companies in the riskiest sectors. They also avoid the lowest-rated sovereigns.
To assess ESG risk, the team uses abrdn’s proprietary ESG House Score developed by its central ESG investment team to assess companies in terms of their responsibility and environmental sustainability. The team ranks countries according to ESG and political factors and excludes those with the highest risk.
“We think that it is possible to invest responsibly without sacrificing returns. We aim to identify opportunities which offer attractive returns and that we believe are responsible.”
“We believe that investors increasingly care much more about how their money is invested and want to understand and manage the risks more effectively. This new strategy broadens our responsible/sustainable range and complements our newly launched Multi Asset Climate funds.”
For its core global equity allocation, the Fund targets a 50% reduction in weighted average carbon intensity3 compared to passive global equities.
2 Article 8 funds are defined as those funds that promote, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices.
3 Calculated by Trucost, this measures the greenhouse gas emitted by a company directly from its operations, from energy consumed and from major suppliers. It is measured in tonnes of C02 per million dollars of revenue.
Global Media Manager
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Notes to editors
About the Fund:
At abrdn, we enable our clients to plan, save and invest for their futures.
We structure our business into three areas – and together they reflect our focus on enabling our clients to be better investors:
Across our investments, adviser and personal businesses we manage and administer £532 billion of assets for our clients, and abrdn plc has over 1 million shareholders. (Figures as at 30 June 2021)
Our investments are built on an insight strength that comes from multi-layered research and a large global footprint. Our teams collaborate across multiple capabilities, to create forward-thinking solutions that aim to meet our clients’ needs and deliver more sustainable outcomes. Our investments business manages £465.3 billion on behalf of individuals, governments, pension funds, insurers, companies, charities and foundations (as at 30 June 2021) – with support and expertise from 800 investment specialists in over 30 locations.
abrdn is the single global brand for all areas of our business. In July 2021 our plc listing became abrdn plc. In September our investments business, formerly Aberdeen Standard Investments, became abrdn.
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