Stockholm (NordSIP) – Three new funds launched by US asset management firm Capital Group promise access to a broad range of sustainable investment themes. The funds are classified as Article 8 under the EU Sustainable Finance Disclosure Regulation (SFDR) and targeted at investors in Europe and Asia.
Investors can choose from a global equity, fixed income or multi-asset strategies via the Sustainable Global Opportunities Fund, the Sustainable Global Corporate Bond Fund, and the Sustainable Global Balanced Fund respectively. The Luxembourg-domiciled UCITS vehicles aim to identify companies that offer compelling long-term investment prospects through their alignment with seven themes mapped to the United Nations’ Sustainable Development Goals (SDGs). The chosen themes are Health & well-being, Energy transition, Sustainable cities & communities, Responsible consumption, Education & information access, Financial inclusion, and Clean water & sanitation.
Capital Group will aim to narrow the universe to those companies with more than half of their business aligned with the selected SDGs. This assessment will typically be carried out on the basis of revenue but will also draw on more sector-relevant financial metrics in specific cases, for instance the energy production mix for utility companies. The strategies also consider transitioning companies that are moving toward higher positive alignment over the long term. While their current alignment may be low, the expectation would be to see material positive change in the near-to-medium term (3-5 years).
Commenting on the launch of the new funds Jessica Ground, Global Head of ESG at Capital Group said: “The UN estimates there is a $4.3 trillion annual financing gap to deliver against the UN SDGs. We believe it will take a wide range of innovative companies to bridge this gap. Companies making improvements in important areas such as ‘financial inclusion’, the ‘energy transition’ or ‘health and well-being’, will play a significant role in the world’s transition to a more sustainable future and can offer compelling long-term opportunities for investors.”
