Stockholm (NordSIP) – The Arabesque Systematic Fund, which uses advanced Machine Learning and AI to handpick the top 100 companies providing the best sustainable investments in combination with maximised returns, is partnering with Feminvest, which is making the Fund available to its network of 20,000 female investors.
Arabesque is rolling out a number of partnerships throughout the Nordic region following heightened interest from institutional and private investors. In addition, Arabesque and Feminvest will undertake a common ‘Nordic Sustainability Tour’, which will start in Malmö March 6, stop in Gothenburg on March 7 and conclude in Stockholm on March 8.
“We will raise issues such as how to help reduce the world’s carbon footprint by, for example, making pension savings more sustainable,” Feminvest CEO Anna Svahn told Sweden’s Veckans Affäre business magazine. Svahn has worked on pushing Feminvest in a more sustainable direction over the past year, ensuring the cooperation comes at a perfect time.
“Arabesque is well in line with the direction we are developing Feminvest into. Cooperation therefore feels like an important step,” Svahn said.
Svahn was impressed with Arabesque’s S-Ray index tool, whose algorithm uses self-learning quantitative methods using ESG benchmarks to process vast reams of data to determine where company behaviour, with data gleaned from over 9,000 companies, corresponds to the normative principles set out by the United Nations Global Compact.
“What is interesting when you look at quantitative analysis is that it is rules-based,” Arabesque Director of Sustainable Investment Maria Mähl told NordSIP last year. “There are no biased perceptions. We [use] it almost as a mirror to see what the world is saying about a particular company, not to reflect what our biased view of that company is. We know that the valuation of stock prices depends on what people’s valuation is.”
“The big difference today, compared to just a few years ago, is that there are a number of studies that substantiate the view that companies that perform well in sustainability are obtaining better returns,” Mähl told VA, citing Boston Consulting Group’s study of 300 companies indicating a 4 percentage point higher profit margin for sustainable investments. In light of the water crisis in South Africa’s Cape Town and the directly harmful air pollution in some Asia cities, Mähl suggests there is clear evidence that Corporate & Social Responsibility (CSR) needs to become a core part of companies’ business model.
“Sustainability analyses require at least as sophisticated methods as the technical analysis of companies,” Mähl said. The Arabesque Systematic Fund has returned 28 per cent over the last 12-month period, shattering the myth, she says, that sustainable investments compromise returns. She believes that Systematic and funds like it can be the financial industry’s self-correcting response to the 2008 recession.
Feminvest will also change its motto from ‘Female ownership makes the difference’ to ‘Gender equality and sustainability make the difference’.
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