Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
… as Amundi launches ESG ‘improvers’ strategies
Amundi Asset Management, Europe’s largest fund manager, has launched two strategies to build on its ESG-related offerings, a European equities and US equities fund, both of which focus on companies which are improving their ESG credentials.
The three points of differentiation with the new funds are:
- an exclusion policy covering companies which sit outside the manager’s ESG framework
- selection of companies which are fundamentally attractive and are showing “real and material” progress on ESG – identified through traditional research, and
- active engagement with company management throughout the investment process to understand and positively impact a company’s financial and ESG credentials.
The European and US portfolios, which are expected to be complemented by more funds and strategies for the new range, consist of concentrated high-conviction holdings.
Vincent Mortier, deputy CIO at Amundi, said: “ESG Improvers is a new concept that Amundi has developed which leverages our strength across various teams and locations. It offers investors an opportunity to be part of an actively managed portfolio of tomorrow’s ESG winners. This fundamental bottom-up concept is designed to offer attractive risk adjusted returns and to encourage companies to improve the ESG credentials.”
Of Amundi’s estimated €1.66 trillion (A$2.6 trillion) under management (as at September 30 last), about €345 billion is in responsible investment assets
The strategies are available to all institutional investors, including those in Australia and New Zealand, but the retail funds launched off their backs are open only to European investors, with the exception of the US fund which is also open to the retail market in Singapore.
