The Ireland-domiciled Ucits fund will invest in a portfolio of 30-40 global equity stocks in sectors such as healthcare, renewable energy and fintech, focusing on the United Nation Sustainable Development Goals. It will aim to outperform the MSCI All Country World Total Return index by 2% – 3% per annum (net of fees) over a three-year rolling period.
Rowe said: “We are seeing considerable demand across clients for truly active, sustainable investment solutions. The fund is a natural extension to the firm’s extensive track record and commitment to responsible investment and we believe it offers something truly differentiated in this fast-growing sector.”
AJ Bell head of active portfolios Ryan Hughes said while Nomura had been incubating the strategy for 18 months “it is hard to look beyond the established players who have been investing in this manner for many years when it comes to selecting a sustainable strategy”.
“Sustainability is clearly the buzzword of the asset management industry right now with not a meeting going by without a fund manager telling us how sustainability is incorporated into their investment process but then again the asset management industry is pretty good at spotting a bandwagon as it passes.”
The Global High Conviction Equity fund run by Wildgoose is marginally ahead of the benchmark over the past three years and has outperformed over the past two calendar years. “Time will tell whether this can be translated to a sustainable strategy, although a paper portfolio has been operating in this manner for 18 months and sustainable investment has been part of Nomura’s approach for longer,” Hughes said.
However, Damien Lardoux, head of impact investing at EQ Investors, said Nomura has developed its approach by integrating environmental, social and governance (ESG) factors into their mainstream equity strategies. “They have also improved on their engagement practises, having identified the importance of changing companies non-responsible behaviours and practises.”
Lardoux added: “Alex Rowe is an example of this new generation of fund managers for whom responsible investing has always been part of the process. So it’s no surprise that he decides to launch a new fund within Nomura and helped to build the process around sustainable strategies within the firm.”
Amanda Tovey, head of SRI at Whitechurch, said while it’s good to see another global asset manager sustainable fund launch, “as we’ve always said, you need to dig down and really understand what the manager in question means when they use the term ‘sustainable’ and understand what processes they have in place when it comes to screening / picking stocks”.