ESG in Investment Process: ESG Funds
Exploring the methodologies used to build an ESG fund that try to beat the market with sustainable investments.
In this report, the ESG Investments team illustrates a particular type of fund, that is increasing its importance between the investor, ESG fund.
In the first part of the report, we describe the most popular methodologies used to build an ESG fund: exclusionary screening, inclusionary screening, impact investing and active ownership. We will analyse their characteristics and their issue, trying to give some examples.
After that, we illustrate a case study: the ESG Multi Asset fund A2 of Blackrock, the biggest asset manager of the world. Firstly, an overview of the fund is given, we will describe the investment strategy and asset allocation. Finally, we compare the returns of the fund with its benchmark, considering relative returns and risk-adjusted returns and their indices.