Schroders has brought out a sustainable multi-factor equity fund, with a global focus and the integration of environmental, social and governance (ESG) factors into a systematic approach.
The fund aims to beat the MSCI All Country World Index. Schroders said it would appeal to UK defined contribution plans, as it will help members invest sustainably. Schroders head of UK institutional, Tim Horne, commented: “DC pensions are increasingly looking at how best to incorporate sustainability into their schemes in response to investor demand and regulatory change. However, until now, this has been a challenge for DC schemes as the charge cap means many actively-managed strategies are out of reach for most schemes. Existing low-cost options also tend to offer a limited approach to sustainable investing.”
The fund will use Schroders’ new proprietary framework, SustainEx, which measures positive and negative ESG impacts. It will also aim to have under half the carbon intensity of the index, while excluding certain industries such as tobacco, weapons and gambling companies.