IFM Investors launches climate transition fundBY JAMIE WILLIAMSON | THURSDAY, 23 JUN 2022 12:38PM
Read more: IFM Investors, Laurence Irlicht
The Australian equities fund aims to help institutional investors reduce carbon emissions exposures while aligning investments to Your Future, Your Super requirements.
IFM Investors said it expects the Climate Transition Fund will have broad appeal among investors looking to decarbonise their Aussie equities portfolios and reduce climate risk without taking on significant tracking error and fees.
It has already received investment from an unnamed industry super fund, the manager said.
Benchmarked to the ASX 300, it offers a low-risk strategy for those looking to align with the Your Future, Your Super performance requirements, IFM said.
The pooled fund targets a 50% reduction in Scope 1 and 2 emissions by 2030 relative to 2019 benchmark levels, and Scope 3 emissions through reduced exposure to carbon intensive companies and taking overweight positions in companies involved in the clean energy and climate-transition space. It will also invest in companies outside of the ASX 300 where suitable.
"IFM will take into account companies' transition capabilities and risks as well as engaging with companies that are assessed to have high transition risk," it said.
"Investors shouldn't have to choose between their tracking error budgets and climate objectives. Our Climate Transition Fund demonstrates that a modest amount of tracking error can drive a reduction in carbon exposure over time and help direct capital towards companies developing climate solutions," IFM Investors executive director, index and quantitative equities Laurence Irlicht said.
"We created the climate transition fund to help institutional investors - such as super funds and endowment groups - reduce their carbon exposure while still ticking the right boxes in terms of risk, fees and performance."
IFM said this fund launch is the latest development in its company-wide plan to reach net zero by 2050. It also plans to have reduced the carbon footprint of its infrastructure assets by 40% by 2030.
Milestones reached so far include having its private equity portfolio certified carbon neutral earlier this year.
Infrastructure plays a key role in multi-asset portfolios
Focusing on stable long-term cashflows linked to inflation and low equity beta, infrastructure can provide diversification and resilience.
Infographic: FROM AUSTRALIA'S LEADING GOLD ETF ISSUER.