HSBC Global Asset Management (GAM) lacks the history of sustainable investing built up by fund houses like Kames and Liontrust, say investors, as the bank reveals the launch of two global sustainable multi-asset funds in response to momentum around ESG investments.
The HSBC Global Sustainable Multi-Asset Conservative portfolio and HSBC Global Sustainable Multi-Asset Balanced portfolio follow the firm’s existing investing methodology, while adding sustainability considerations.
The Conservative Portfolio, typically with around 35% equity exposure, aims to deliver a lower level of volatility than the Balanced portfolio, typically with circa 60% equity exposure.
There is clearly growing demand for investment solutions with a sustainable focus and there will be more launches in this area, said Ryan Hughes, head of active portfolios at AJ Bell. “Personally, when looking at sustainable or ethical solutions, I prefer those managers who have a long history of investing in this manner as the principles they follow are typically deeply-embedded in their investment philosophy.”
The Kames Ethical Cautious Managed fund currently sits on the AJ Bell preferred funds list and Hughes also likes the Liontrust Sustainable Future Cautious Managed fund.
Competitors
The HSBC global sustainable multi asset portfolios will be available from November and will seek a higher average ESG score and lower portfolio carbon intensity than the market.
It will do this by only including asset classes in long term allocations where sustainable characteristics can be measured and will follow one or more of the seven industry recognised sustainable investment methods, as set out by the Global Sustainable Investment Alliance.
The portfolios have an annual management charge of 0.45% with an estimated ongoing charges figure of 0.75%.
“The number of funds focusing on this area is relatively limited but is likely to grow as sustainability and ethical investing increases in popularity,” Hughes said.
The Kames Ethical Cautious Managed fund, which is over £500m in size, and has been around for over a decade, is one of the most well-established multi-asset funds in the space, while Royal London also have “good pedigree” and could be a big competitor in the advisory market, Hughes said.
Adrian Lowcock, head of personal investing at Willis Owen, questioned whether advisers would feel confident using a bank for these services. Last week, HSBC GAM also launched a managed portfolio service for intermediaries but concerns were raised around whether advisers will use the high street bank.
Daniel Rudd, head of UK wholesale at HSBC GAM said: “Sustainability considerations are becoming more prominent across all walks of life, from green energy, to free-range farming, people are looking for sustainable solutions to everyday problems.”
