PGIM has launched the PGIM Jennison Carbon Solutions Equity Fund, a UCITS vehicle investing in decarbonisation opportunities.
The fund, which resides under the firm’s active equity manager Jennison Associates, adopts an all-cap and global approach to bottom-up stock selection. In total, the fund will hold between 45 and 65 companies at any one time.
Managers Neil Brown, Jay Saunders and Bobby Edemeka seek stocks that contribute towards lowering carbon emissions via renewable energy, infrastructure modernisation, energy efficiency and carbon capture. They also incorporate Scope 4 emissions – emission reductions which occur outside of the value chain of a product – within their analysis.
The fund is benchmarked against the MSCI All Company World Index Investable Market Index, and is classified as Article 8 under SFDR.
Co-manager Brown believes we are “in the early stages of a transition to a low-carbon economy”, which means there are growth opportunities yet to be fully priced into stocks.
“Crucially, our fund looks beyond reported emissions statistics with an eye on companies aiding in the avoidance of future emissions, which opens up significant investment opportunities that are overlooked by investors,” he said.
“We believe our holistic and realistic investment approach of targeting underrepresented and underappreciated sectors, which meaningfully contribute to lowering global carbon emissions, creates a pathway for us to generate long-term returns for our investors.”
Rob Hall, head of UK Distribution at PGIM Investments, said: “We believe investors are underestimating the extent to which decarbonisation is going to be driven by more sectors than originally perceived. This means the market is missing how big the investment opportunity set really is.
“We are launching the PGIM Jennison Carbon Solutions Equity Fund in response to strong demand from our international clients to invest in a fund that addresses this gap.”
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