Legal & General Investment Management (LGIM) has expanded its Multi-Index range with the launch of two sustainable investment focused Future World funds for investors that seek diversification across asset classes while incorporating environmental, social and governance (ESG) considerations.
This brings two of LGIM’s franchises together into a new product and builds on the success of the £3.2 billion Multi-Index range that combines a mixture of index tracker funds with investments across equities, bonds and commercial property.
These new funds aim to provide long-term investment growth within two pre-determined risk profiles, to suit clients’ risk and sustainability objectives. The firm asserted that this results in exposure to a diversified range of asset classes such as equities, fixed income securities, money market instruments, and alternatives including property. The majority of each fund will be invested in assets that incorporate LGIM’s Future World principles or funds that clearly define a set of ESG criteria.
These funds are tilted to reduce exposure to companies associated with poor ESG practices and provide greater exposure to those with better practices. In 2018, the firm assessed over 11,000 companies under LGIM’s ESG scoring methodology, and voted against 3,864 board directors globally on behalf of our clients. In addition, the Future World Protection List excludes from the funds those companies which we believe pose the greatest risk to future returns, including controversial weapons manufacturers, ‘pure’ coal manufacturers and violators of the UN Global Compact.
LGIM stated that the launch of these products was due to demand from both retail and institutional investors.
Emiel van den Heiligenberg, Head of Asset Allocation at LGIM said in a statement: “We’re seeing increased demand from investors for portfolios which are aligned to their values and can generate capital growth and income within their preferred risk parameters. The two new funds bring together our flagship Multi-Index and Future World ranges to fulfil this need, through combining our expertise of active asset allocation, risk targeted investing, and ESG integration.”
LGIM has over £1 trillion in assets under management as of December 31 2018, this came despite outflows from the firm’s index tracking products last year.