FMOTY: Spotlight on Responsible Investment

Ausbil Australian Ethical Candriam impax asset management FMOTY Fund Manager of the Year responsible investment

19 June 2023
| By Laura Dew |
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Ahead of the 2023 Fund Manager of the Year Awards on 22 June, Money Management spoke to finalists of the Responsible Investment Fund of the Year.

The finalists in the category are:

  • Ausbil Active Sustainable Equity 
  • Australian Ethical Emerging Companies (Wholesale)
  • Candriam Sustainable Global Equity
  • Impax Sustainable Leaders 

Click here to view the full list of finalists.

This year’s finalists referenced the war between Russia and the Ukraine and the impact that had had on portfolios as the oil price surged and prompted discussions around renewable energy.

Nicholas Condoleon, senior portfolio manager for large caps at Ausbil, said: “The invasion of Ukraine by Russia emphasised a long conversation that has been happening in decarbonisation and renewables as energy prices rocketed and energy security became a growing geopolitical concern. 

“People and policymakers alike are now asking where their energy comes from, how sustainable it is, and how we are going to reduce the carbon in our world and help soften the impact of global warming. This benefited our positioning in key companies that provide battery materials.”

A spokesperson for Candriam said: “The first quarter of 2022 where the outperformance of energy and defense related sectors due to the war in Ukraine was challenging for our ESG strategy as these sectors score weakly on our proprietary ESG metrics and so were not in our portfolio. 

“However, 2H 2022 and Q1 2023 have seen a moderation in these sectors compared to others and a return to strong relative performance for the strategy with multiple sectors driving performance, again validating a diversified portfolio approach.”

They also referenced the growing demand for products in this field as ESG grew in favour.

A spokesperson for Impax said: “We have seen the demand for this asset class grow over the years as investors and capital allocators become more focused on the transition to a more sustainable economy. 

“One way to demonstrate this is in the growth of the investible universe for Impax’s thematic equity strategies – in 2007 the universe consisted of c.700 stocks, whereas it now consists of c.2500. The increased breadth of the universe provides a broader opportunity set for Impax’s investment team to generate alpha.”

Australian Ethical, which had been investing in this space for over 30 years, said demand had been increasing in this space.

“Given we have a 36-year history as a pure-play ethical investor, it is gratifying to see demand for responsible investing really gathering momentum.

“Australian Ethical has had a tremendous few years in terms of growth, with our overall FUM now at more than $8 billion.

“We’re still seeing positive net flows into the fund; especially given continued interest in renewable energy investments, which provide the ballast of cash flow certainty and dividends and enable us to invest in early-stage companies that offer strong growth potential.”

Looking ahead to how their funds were positioned for the next 12 months, the teams expected the difficult macroeconomic environment to continue into 2024.

Condoleon said: “We are positioned for a macro environment that is demanding, with slowing growth, higher interest rates and some stubborn inflation. While we believe inflation has peaked, we also think it will take some time to come down with the economy at full employment, consumers holding higher levels of savings following COVID, and ongoing demand for Australia’s resources.”

Impax said: “While sentiment improved towards the end of the quarter, we expect the macroeconomic environment will remain tough with decelerating earnings estimates, an uncertain economic outlook and higher interest rates. We anticipate that markets will be relatively flat and volatile for the rest of 2023.”

Winners of the 2023 Fund Manager of the Year Awards will be announced on Thursday, 22 June 2023 at a black-tie gala awards ceremony at The Star in Sydney.

Click here to buy tickets to the awards ceremony.

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