Monday, 2 July 2007

Schroder climate change fund

Just spotted this, though it's a few weeks old. First retail investment fund I have seen that focuses on climate change.

Schroders announces the launch of the Schroders Global Climate Change Fund which opens to investors in September 2007*. The fund is the first of its kind in the UK, offering investors exposure to companies involved in mitigation of (measures to reduce carbon dependency), or adaptation to (changes to adapt to the consequences of), the effects of climate change on a globally diversified basis.

The aim of the Schroders Global Climate Change Fund is to provide long term outperformance of the MSCI World Index from a concentrated portfolio of 50 to 80 stocks comprising the best stock ideas from the fund’s joint managers, Simon Webber and Matthew Franklin.

Stocks will be selected and weightings determined independently of the Index.

Simon Webber, Joint Fund Manager of Schroders Global Climate Change Fund commented: “Investors simply can’t afford to ignore the realities of climate change. Across all sectors, climate change will have a broad and lasting impact along the value chain. For the mainstream equity investor, now is the time to adopt a global approach to what will be a major investment theme for the foreseeable future. Crucially, Schroders has the capability to take a global approach to a global challenge – enabling us to identify the broadest possible opportunity set”

Schroders has established a proprietary database of companies where the effects of climate change have a significant impact on the long-term investment case. Having established the investment universe, the team will focus on the very best ideas that have been identified by Schroders global equity team and locally based equity portfolio managers and sector specialists.

Simon Webber and Matthew Franklin (Joint Fund Managers) will be supported by a team of climate change specialists, global sector specialists as well as Schroders’ wider global network of 80 experienced large and small cap analysts.

3 comments:

Peter Shield said...

Tom,
Schroders is soon to be followed by other funds if the financial press is to be believed. While this is the first Fund of its type Citibank published a list of 75 companies likely to benefit from climate change at the beginning of the year. When they say benefit they mean either that the companies produce products and services that help reduce our reliance on fossil fuels or companies that are in the business of helping us adapt to the impact of climate change. Aegon have also published a paper on the long term investment opportunities of climate change, I wrote it up a couple of weeks back for www.naturalchoices.co.uk. (See http://www.naturalchoices.co.uk/Climate-Change-the-investment?id_mot=1)

Many ethical investment funds have had a bias towards companies involved with �the technologies of the future� for the past 24 months or so, the increased interest in these technologies across the investment community has lead to huge activity on AIM-the preferred exchange for companies of this type. It is also arguably one of the factors contributing to the outstanding performance of a number of the ethical funds- most notably the F&C Stewardship Income Fund, now ranked 4th in the Uk Equity Income Sector according to Morningstar.co.uk (Not to be confused with The Morning Star).

It will be interesting to see what will happen to this sector as it appears to be going through a Dot Com 1999/2000 moment. While there is no doubt that the underlying value of many companies that are deeply involved with new energy technologies will increase over the medium term I have my doubts whether the present stock market valuations are sustainable, and I fear that the resultant crash, if it occurs will frighten investors off what is a crucial element for dealing with climate change.

Pete Shield
Editor
http://www.naturalchoices.co.uk

Tom P said...

Thanks for the comment Peter (I've only just spotted it!). Interesting article - I'll give it a plug!

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