BNY Mellon Investment Management (BNYMIM) and Newton Investment Management have launched an ESG-focused emerging markets fund, the BNY Mellon Sustainable Global Emerging Markets Fund.
The actively-managed fund harnesses Newton’s responsible investment expertise and will be managed by Ian Smith and Paul Birchenough, global emerging markets portfolio managers at Newton.
According to the BNYMIM, the fund targets emerging market investment in companies that proactively manage ESG factors and generation sustainable returns. This includes solutions providers tackling social and environmental issues, best in class operators, and companies committed to investing in and adapting to future environmental and social requirements.
The fund will also target companies that promote sustainable business practices through engagement and will exclude those with material ESG issues in their business models.
“Lower- and middle-income countries represent over 80% of the global population, and an even higher proportion of the younger population. It is thought that roughly two thirds of the $5 to $7 trillion annual investment required to meet the UN Sustainable Development Goals by 2030 will need to be deployed in the developing world,” said Smith and Birchenough.
“Yet emerging markets represent little more than 10% of global equity indices. The data consistently demonstrates under-served needs and under-representation. It also speaks to significant opportunity to ride with the tailwinds around rising real incomes and urbanisation, as well as the adoption of technologies around clean energy, electrification, digitisation and healthcare.”
According to head of UK intermediary distribution at BNY Mellon Investment Management, Michael Beveridge, there a currently few equity products focusing on sustainable opportunities in emerging markets.
“The launch of the BNY Mellon Sustainable Global Emerging Markets Fund comes at a pivotal time for UK investors, as demand for sustainable solutions is high. There are currently very few equity products focusing on sustainable opportunities in global emerging markets,” he said. “With Newton’s proven track record in global emerging markets and longstanding expertise in responsible investing, the fund aims to provide investors with a sustainable emerging markets equity product that provides long-term capital growth while adhering to sustainability criteria.”
The performance benchmark for the fund is the MSCI Emerging Markets NDR Index. The fund forms part of the UK-domiciled BNY Mellon Investment Funds (MIF) range and is available to institutional, intermediary and retail investors in the UK.
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