As Scotland prepares to host the delayed COP26, and the US is set to re-join the Paris Climate Agreement this month, ESG Clarity‘s sister title Portfolio Adviser asked fund buyers to reveal their top fund to play the green agenda this coming year.
James Clark, senior fund analyst, Hawksmoor Investment Management
“My pick would be Ninety One Global Environment. We don’t yet invest in the fund in Hawksmoor’s Sustainable World services but have done four items of due diligence on the fund and are giving it further consideration. Co-managers Dierdre Cooper and Graeme Baker both come across very well, and a key aspect of the fund is its quantified carbon avoided methodology. This is a differentiating feature, as is the meaningful China exposure in the portfolio. The fund’s process is well-structured; I like how the valuation element includes three different components; and the strategy has performed strongly since inception in 2018. Ninety One Global Environment is highly aligned with the green agenda ahead of COP26.”
Louisiana Salge, senior sustainability specialist, EQ Investors
“With the flagship UN Climate Change Conference set to take place in the UK, it’s very likely that we will see green energy at the top of the national agenda as the UK government announces new policy initiatives. One fund we expect will continue to perform well with these tailwinds is Greencoat UK Wind plc, the UK’s largest renewable infrastructure fund. The portfolio’s assets are exclusively invested across operating onshore and offshore UK wind farms which produce a stable dividend stream for investors. As more capital is attracted to the sector, we are likely to continue seeing falling costs of capital for green infrastructure projects.”
Kelly Prior, investment manager, BMO Global Asset Management
“This is a fascinating area that we at BMO Global Asset Management have been dedicating a reasonable amount of resource to in recent months. The scope of offerings are varied which presents opportunities and challenges for anyone looking to invest with a clearer conscience. The likes of Hermes have sustainable investing at their heart and, much like BMO Global Asset Management, have been doing this for longer than most. While the equity space gets more airtime than most, we would put forward the Hermes SDG High Yield fund as a solid offering in this space.”
Michael Paul, head of fund research, Brewin Dolphin
“I will highlight Liontrust Sustainable Future Global Growth as a fund well positioned to benefit from the new green agenda set out for next year’s delayed UN Climate Change Conference. The fund is managed by the experienced duo of Simon Clements and Peter Michaelis, and managed along 20 sustainability themes encompassing resource efficiency, improved health and greater safety and resilience. A number of the sub-themes will no doubt align closely to the agenda that emerges from the conference, and the underlying companies will enjoy the tailwind this provides.”
Rory McPherson, head of investment strategy, Psigma Investment Management
“The green agenda has been prevalent this year and we expect that to continue. We’ve had huge money pledges (notably from the EU with its recovery fund), China pledging carbon neutrality by 2060 and, more recently, Joe Biden pledging US support for the Paris Climate Accord. We believe the Ninety One Global Environment fund is an excellent way to access this theme. The fund focuses on three key areas of decarbonisation: renewable energy, resource efficiency and electrification. As well as offering an excellent investment proposition, the fund aims to have a measurable positive impact through investing in the companies that are solving the world’s environmental challenges. The fund has been an outstanding performer since we added to it in May this year and we believe this area of the market can continue to outperform in the future.”
