UK-based Aviva Investors has launched a multi-asset fund that limits fossil fuel investments and is aimed at retail investors in Singapore.
The Aviva Investors Sustainable Income and Growth Fund targets 5% income and long-term capital growth from a portfolio of 80 to 120 securities.
The firm said environmental, social and governance (ESG) criteria was fully integrated and sectors such as tobacco and controversial weapons would be excluded.
Energy companies whose revenue from coal exceeds 10% will not be invested in and the fund aims to improve sustainability via engagement and proxy voting.
Securities are drawn from the MSCI All Country World Index and the Bloomberg Barclays Global Aggregate Bond Index. Francois de Bruin, the fund manager, said companies will be selected on the basis of sustainable business models and underlying revenue streams, “with an emphasis on cash flows to deliver compounding interest over time”.
He added: “By focusing on assets likely to generate dividends and coupons during draw-down rather than selling shares for income, the fund will help mitigate the risk of permanent loss of capital when markets are depressed.”
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