Robeco launches sustainable equity fund

Robeco Australia has launched the Robeco Global Developed Sustainable Enhanced Index Equity Fund which aims for a higher score on environmental, social and governance (ESG) criteria than the benchmark MSCI World Index.

The fund aimed to reduce the environmental footprint for greenhouse gas emissions, water use, waste generation and energy consumption compared to the benchmark, while maintaining the ability to provide alpha in developed markets.

Stephen Dennis, head of Robeco Australia, New Zealand and Oceania, said: “With increasing demand for sustainable investing solutions, launching a fund offering Australian investors a sustainable alternative to passive investments was a logical development”.

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The strategy would use a values-based exclusion list formulated by Robeco’s active ownership team which included voting and engagement factors.

The fund would use a quantitative stock selection strategy which ranked stocks according to sustainability criteria as well as their expected future relative performance in terms of value, quality, and momentum.

The portfolio would overweight stocks with a strong sustainable profile, attractive valuation, a profitable operating business, strong price momentum, and positive recent revisions from analysts.

Dennis said: “Our enhanced indexing strategies have a similar absolute risk profile as passive strategies and can generate better returns by actively integrating sustainability as well as incorporating 50 years of factor investing research”.

It would be managed by Robeco’s core quant equities team, responsible for managing a wide range of enhanced indexing strategies including global, European, US and emerging market strategies.

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