Columbia Threadneedle launches emerging markets ESG equities and pan -European ESG Equities funds

Columbia Threadneedle Investments has expanded its fund range with the launch of the Threadneedle (Lux) Emerging Market ESG Equities and the Threadneedle (Lux) Pan European ESG Equities funds. 

The fund launches are part of a strategic build-out of the firm’s responsible investment offering.

William Davies, Chief Investment Officer, EMEA at Columbia Threadneedle Investments, says: “Growing investor demand for strategies with a responsible investment orientation has proven to be one of the most significant shifts in asset management in a generation, and recent European sustainable finance regulations have only served to accelerate this trend. We are pleased to reflect these market developments by adding two new ESG funds to our responsible investment offering, to sit alongside our existing sustainable outcomes fund range.”

The Threadneedle (Lux) Emerging Market ESG Equities Fund is managed by Young Kim, Senior Portfolio Manager. Using Columbia Threadneedle’s proprietary responsible investment ratings and research, and combining it with fundamental company analysis, Young will systematically apply Environmental, Social and Governance factors to identify growth opportunities and material risks in emerging market companies. He will focus on high quality innovative businesses which he believes can sustain high returns on capital and strong growth over the long term. He will also seek out companies with innovation at their core, which have the potential to gain competitive advantage, win market share and drive long-term growth by creating and embracing new ideas, processes and technology.
Kim, manager of the Threadneedle (Lux) Emerging Market ESG Equities Fund, says: “When sustainable business attributes form the foundations of a company’s character, they tend to inform business strategy and result in long-term sustainable practices. A growing number of companies in emerging markets now recognise the value of adopting ESG business practices and the potential positive effect it can have on generating additional shareholder returns. By evaluating a company through the ESG lens, we can gain a comprehensive understanding of how ESG risks are considered and used to sustain its long-term future. This explicit focus on long-term opportunities and risks emanating from ESG factors, combined with our active management approach, has the potential to deliver better risk-adjusted returns for our clients.”
The second fund, the Threadneedle (Lux) Pan European ESG Equities Fund, is a conversion of the Threadneedle (Lux) Pan European Equities Fund. It will continue to be managed by Ann Steele and Dan Ison, who have been increasing the intensity of ESG analysis in the fund over the past 18 months. The managers aim to deliver capital growth by investing in companies with sustainable competitive advantages and strong operating practices. 

Ann Steele, Co-Manager of the Threadneedle (Lux) Pan European ESG Equities Fund, says: “While the market is still assessing the long-term consequences of the coronavirus pandemic, ESG issues – particularly the significant social impact – have become even more important. They are a key part of the new economic reality, as regulatory oversight covering emissions and social responsibility will continue to grow. We have always successfully focused on high-quality companies with a strong competitive advantage, pricing power and high barriers to entry. Incorporating ESG factors into the definition of quality has been a natural evolution, helping to boost outperformance. The fund conversion is testament to our success in increasing the intensity of our ESG analysis.”