KBI Global Investors (KBIGI) has launched two Article 9 global equity funds – a core sustainable strategy and a health and wellbeing strategy.
The Global Core Sustainable strategy, which has been launched following a two-year incubation period, will hold 100 to 150 stocks.
These will be chosen by KBIGI’s global equity team, using a systematic approach to seek firms which are aligned to the UN’s Sustainable Development Goals while maintaining a low tracking error relative to the MSCI All-Country World index. The approach will also seek stocks which offer high active share and industry neutrality versus the benchmark, while some 80% of its active risk remains the result of active stockpicking.
The strategy has been launched due to KBIGI’s belief that firms tackling environmental and social issues will manage risk more effectively, build better relationships with shareholders and grow at a steadier pace than their peers.
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Elsewhere, the firm’s new Global Health and Wellbeing strategy, managed by Craig Bonthron, marks the sixth strategy to be managed by KBIGI’s fundamental investment team.
It will hold stocks which chiefly provide medical, safety and wellness services. Some 10-35% of the fund will be allocated to the ‘wellness’ segment, which will include economic wellbeing, lifestyle and education stocks. Elsewhere, 5-25% will reside in the ‘safety’ segment, which will encompass physical, digital and environmental safety companies. A majority of the fund will reside in medical stocks at a 60-85% target allocation; this will include medical diagnosis, care and medical cure company names.
The fund, which is benchmarked against the MSCI World Healthcare index, will aim to hold more small- and mid-cap stocks and fewer mega caps, than its peers. It also aims to offer more exposure to the consumer, industrial and technology sectors.
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Geoff Blake, KBIGI’s CEO, said the responsible investing landscape “continues to evolve, with the industry characterised today not only by growth, but by a clear divergence in ambition, execution, and conviction”.
“We are working against a complex geopolitical backdrop, some of our peers leaving the market over the last two years, some reining back on their commitment, others changing direction completely,” he explained.
“This has, of course, been a difficult period for the relative performance of most Article 9 strategies, for two main reasons, namely the concentration of performance in equity markets from US mega tech stocks – a number of which align poorly with the United Nations Sustainable Development Goals (‘SDGs’) – and the political and regulatory pushback to responsible investing, especially in the US.
“This has caused a shift in investor sentiment, but responsible investing is a core component of our investment approach here at KBI Global Investors and our conviction remains absolute, so while ours may seem a contrarian stance to some, we view current conditions as aligned with our long-term investment approach, our dialogue with investors underpinning our decision to launch.”
