Stockholm (NordSIP) – Man AHL, Man Group’s diversified quantitative investment engine, announced the launch of Man AHL TargetClimate, its first UCITS fund classified as Article 9 according to the Sustainable Finance Disclosure Regulation (SFDR), as well as Man Group’s first systematic Article 9 fund.
“We are pleased to launch Man AHL’s first climate-focused fund and to continue diversifying Man AHL’s offering to investors. We developed AHL TargetClimate because we saw a real opportunity to bring our multi-asset, risk management and quantitative expertise to a space that has traditionally been the domain of discretionary investors. The strength in our approach is that the ongoing debate about whether ESG leads to better returns doesn’t enter into the equation; we can focus all of our efforts on allocating to the securities that are most aligned with climate change mitigation within our investable universe while still offering an attractive risk/return profile based on our tried and tested portfolio construction and risk management techniques,” Matthew Sargaison, CEO at Man AHL, says.
Man AHL TargetClimate’s environmental performance will be measured against a Paris-aligned benchmark that is targeting decarbonisation of around 7% per annum. Transparency is key, with AHL reporting across a range of environmental metrics.
Portfolio Construction
Man AHL TargetClimate is a risk-managed, multi-asset fund that invests in assets aligned with the transition to a low-carbon economy. The strategy removes any particular social and governance laggards and looks for securities that rank highly across a variety of environmental metrics amongst AHL’s liquid universe.
“Identifying securities that are climate aligned is a complex and nuanced exercise. There is a lot of noise and it requires a data-driven approach to clean, analyse and gain insights from the multiple data sources available, something we have been doing across AHL for over thirty years. With the support of our RI, stewardship and data science teams, our goal is to offer investors a systematic, climate-focused investment solution that is intellectually sound and robust, and that will adapt as new data, insights and technological advancements arrive,” Otto Van Hemert, Director of Core Strategies at Man AHL, says.
Instead of investing in climate-focused securities, Man AHL argues that TargetClimate’s systematic portfolio construction and risk management techniques allow climate considerations to be the primary driver of security selection. Using a data-driven approach, the team at Man AHL leverage multiple data sources and the expertise of Man Group’s Responsible Investment (RI) and data science teams to identify and select securities most aligned with the transition to a low-carbon economy within multiple asset classes, namely equities, credit, government bonds, commodities and green bonds.
The fund also incorporates Man AHL’s proprietary risk management techniques and uses highly liquid futures as a hedge during difficult market conditions, allowing the fund to manage risk dynamically while maintaining its stable long portfolio of assets aligned with the climate transition.
“AHL TargetClimate is a strong addition to our RI-focused fund range, leveraging our quant capabilities to deliver a truly innovative climate-focused product for clients. This fund has been built from the ground up to meet the rigour of Article 9 status and we are proud of the work we have done collectively to develop frameworks that evaluate the ESG characteristics of non-corporate assets. We look forward to welcoming investors into the fund as we continue to expand our RI-focused offering,” concludes Robert Furdak, CIO for Responsible Investment at Man Group.
