MEDIA RELEASE: Robeco Australia has launched the Robeco Global Developed Sustainable Enhanced Index Equity Fund (AUD), which aims for a higher score on Environmental, Social and Governance (ESG) criteria than the benchmark (MSCI World Index).
The fund aims to reduce the environmental footprint for greenhouse gas emissions, water use, waste generation and energy consumption compared to the benchmark, while maintaining the ability to provide alpha in developed markets.
The strategy uses an extensive values-based exclusion list and includes voting and engagement, which will be carried out by Robeco’s Active Ownership team.
The fund uses a quantitative stock selection strategy which ranks stocks according to sustainability criteria as well as their expected future relative performance using the factors value, quality, and momentum, resulting in a well-diversified portfolio with a low tracking error relative to the index.
The portfolio overweights stocks with a strong sustainable profile, attractive valuation, a profitable operating business, strong price momentum, and positive recent revisions from analysts. It is managed by Robeco’s Core Quant Equities team, responsible for managing a wide range of Enhanced Indexing strategies including global, European, US and emerging market strategies.
As of 30 September 2021, Robeco manages over AUD 43 billion of assets globally in its Enhanced Indexing strategies, of which AUD 14 billion are managed on behalf of institutional investors in Australia and New Zealand.
Stephen Dennis, Head of Robeco Australia, New Zealand & Oceania: “With increasing demand for sustainable investing solutions, launching a fund offering Australian investors a sustainable alternative to passive investments was a logical development. The fund addresses the pitfalls of passive investing, actively integrates ESG criteria, and is a sustainable solution for investors looking for stable outperformance after costs, with a low tracking error.
“Our Enhanced Indexing strategies have a similar absolute risk profile as passive strategies and can generate better returns by actively integrating sustainability as well as incorporating 50 years of factor investing research.”