Irish Life Investment Managers (Irish Life) is to launch a new environmentally sustainable, socially responsible fund with California-based financial services company, Research Affiliates.
The fund, which will have $100 million (€90.6 million) in initial funding, is the first to be launched here based on Research Affiliate’s ESG (environmental, social and governance) indices, which are designed to tap into growing demand for investment products that address concerns over environment and other social issues such as diversity.
The Irish Life RAFI ESG Developed Equity Fund offers investors the opportunity to make socially responsible investments along with the potential for long-term market outperformance, Research Affiliates said. RAFI is one of the company’s most popular group of indices.
It is the only ESG fund with a smart beta –the industry term for portfolios created around certain stock characteristics – engine to drive empirically robust returns, while combining traditional ESG screens on the environment, social responsibility and governance, and an emphasis on financial discipline and gender diversity.
Financial discipline
"Demand for responsible investing has soared in recent years and we expect it to continue to grow," said Katrina Sherrerd, chief executive of Research Affiliates. "Our ESG strategies aim to support sustainability and diversity around the world without sacrificing return," she said.
The fund has a preference for companies that display financial discipline and diversity, two metrics aligned with the tenets of ESG investing which research shows are associated with superior financial outcomes, she said.
It features a diversified portfolio of 491 stocks across all sectors of developed economies.
About $160 billion of assets managed by external asset managers are allocated using RAFI, which is licensed to Research Affiliates.
