Hermes Fund Managers (Hermes) has launched the Hermes Global Equity ESG Fund, providing investors with the opportunity to invest in companies throughout the world that have positive ESG features.
Launched on 1 May 2014, the fund is managed by Geir Lode, Head of Hermes Global Equities, and aims to achieve long-term capital appreciating by investing in companies with favourable ESG characteristics. Its target return will be to exceed the return of its benchmark, the MSCI All Country World Index, by 3% p.a. on a three year rolling average basis.
Further to this, the team has access to Hermes’ engagement team, Hermes Equity Ownership Services (EOS), which is made up of highly skilled professionals who focus on corporate governance, providing up to date and in-depth analysis on environmental, social and governance issues globally.
Geir Lode, Head of Hermes Global Equities, said: “There is increasing demand from investors for ESG-informed products and we believe this does not need to be at the expense of performance. Our research has shown that well-governed companies have outperformed poorly-governed counterparts by an average of over 30 basis points per month since the beginning of 2009.
“The Hermes Global Equity ESG Fund considers companies’ fundamentals, combined with analysis on how well they are managing their ESG exposure, to identify stocks with the best risk/return characteristics. We favour companies who are managing their ESG risks better than their peers, or companies who are demonstrating an increasing focus on ESG issues. The global approach of the fund allows us to consider companies in emerging markets, an area where there is a greater dispersion of ESG characteristics, and where we believe that our approach can be particularly effective.”
Past performance is not a reliable guide to future performance. Return targets cannot be guaranteed.
 Hermes used internal sources as well as external providers such as Trucost, Sustainalytics, Bloomberg and FactSet. We analysed companies in the MSCI World index from the end of 2008 to end of November 2013.