Franklin subsidiary rolls out more custom ESG tweaks for SMAs

Data visualization and country exclusions are new, O’Shaughnessy says


Franklin Templeton subsidiary O’Shaughnessy Asset Management has put more resources into the ESG investing feature within its Canvas custom indexing service, including options to avoid investments within Russia and other countries, the company announced today.

The Stamford, Connecticut-based firm added a new ESG portfolio construction interface to the system, allowing advisers to “establish a transition plan and lock-in tax specifications,” the company said. The service also has more data visualization now, providing “dynamic feedback such as expected return impact, position-level over and underweights, and thematic repositioning of the portfolio.”

It also has ESG-specific performance reporting and allows country exclusions.

“Canvas offers simple and efficient customization,” CEO Patrick O’Shaughnessy said in the announcement. “Do you want to build a custom ESG portfolio? Do you want to exclude Russia-based companies? Do you want to build a momentum-based portfolio? With Canvas, you can do all of this.”

Providing more transparency in allocations can show investors that their holdings reflect their values, the company said.

The service is used to build custom indexes within separately managed accounts. Advisers choose ESG themes including carbon intensity, community relations, gender diversity, alcohol and firearms, according to the firm. Canvas also allows users to overweight companies with high ESG scores, rather than relying on exclusions alone, with the interface having options to “exclude the worst” and “reward the best.”

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