Stockholm (NordSIP) – Global asset manager Schroders announced the ISF European Equity Impact, a strategy created in response to investor demand for impact-driven investment solutions in European equities. The fund will be managed by Leon Howard-Spink and Paul Griffin, European equity fund managers with more than 25 and 20 years of investment experience.
The new strategy is a transition from the SISF European Innovators and is classified as an Article 9 fund under Sustainable Finance Disclosures Regulation (SFDR). “The fund is for clients with a long-term investment horizon who are less focused on short-term relative performance compared to the MSCI Europe and who want their capital allocated to companies that generate a positive impact on the environment and society,” Griffin (Pictured, left) tells NordSIP.
As of writing, 38.7% of the fund is invested in industrial companies, followed by healthcare stocks (25%), IT (19%), materials (11.6%) and liquid assets (5.7%). 16.9% of the fund is invested in Germany, followed by 16% in the UK and the USA, respectively. Assets in Sweden (10.2%), Denmark (6.3%) and Norway (4.4%) represent making the Nordics responsible for a fifth of the strategy. “The fund invests in the Nordics and among others holds Norwegian Borregaard (6.28%) and Danish Novo Nordisk (4.39%) in its portfolio,” Howard-Spink adds.
Active Ownership and Engagement
“Through active ownership and engagement, we aim to not only invest in companies making a positive impact but also actively support their journey towards sustainable development. By working closely with companies, we can drive meaningful change and contribute to a more sustainable future,” Griffin comments.
The Schroders ISF European Equity Impact strategy integrates Schroders’ in-house Impact Framework which has been developed in partnership with BlueOrchard and was praised for its alignment with the Operating Principles for Impact Management by BlueMark.
It focuses on active ownership and incorporates multi-year engagement plans, developed in close partnership with Schroders’ Head of Engagement, for each investment in the portfolio to ensure that companies are actively encouraged to improve their impact over time.
“Schroders’ comprehensive Impact Framework identifies innovative European companies that align with SDGs. By integrating impact considerations into our stock-picking approach, we believe we can deliver a positive societal impact whilst aiming for attractive long-term returns for our investors,” Howard-Spink (Pictured, right), Fund Manager at Schroders, says.
Investing in the SDGs
The investment process includes extensive due diligence in the form of proprietary impact scorecards. The fund consists of a concentrated portfolio of highly innovative, European-listed companies that are actively contributing to advancing the United Nations’ Sustainable Development Goals (SDGs).
“It is our belief that the fund’s portfolio of established, profitable companies whose technological, scientific and market leadership bring innovation to address a range of UN SDGs should drive above average financial returns. Portfolio holdings meet in-house ESG criteria and exclusion screens, as well as actively contribute to a number of the UN SDGs,” the portfolio managers conclude.
