Listed Impax Asset Management has been appointed as sub-advisor for the NEI Global Sustainable Balanced Fund by Northwest & Ethical Investments (NEI).
The fund, which is only available in Canada and as of 1 May 2020 had assets of CAD $115 million, is a diversified portfolio of equity and fixed income securities designed as a one stop global balanced impact solution. The NEI fund focuses on environmental and social impact issues in Canada.
This follow from Impax winning the mandate to run the Desjardins SocieTerra Environment Fund in Canada at the end of last month.
Similarly to Desjardins, NEI will use a pre-existing Impax model, its Leaders strategy. This contains Impax’s best ideas from the last two decades of specialising in investing in the transition to a more sustainable economy. Its objective is to deliver sustainable, above market returns over the long-term by identifying mispriced companies that address several long-term macroeconomic themes: growing populations, rising living standards, increasing urbanisation, rising consumption and the depletion of limited natural resources.
The equity mandate will be run by Hubert Aarts, David Winborne and Sid Jha. It has a concentrated portfolio of 40 to 60 companies and invests over a five to seven-year horizon with a low turnover. The portfolio has broad geographic and sector exposure relative to the MSCI ACWI benchmark.
The fixed income part of the portfolio will leverage Impax’s knowledge of investment grade and high yield bonds offering, which was greatly enhanced by the firm’s acquisition of Pax World in 2017. The fixed income portfolio won’t just replicate the broader fixed income universe but avoids certain pitfalls and idiosyncrasies of green and impact bond indices.
The core bond portfolio – managed by Anthony Trzcinka and Peter Schwab – invests in corporate, sovereign, securitized and municipal bonds supporting eight areas of impact, including gender equality, affordable housing, education, sustainable infrastructure, and community development. Its benchmark is the Bloomberg Barclays U.S. Aggregate index.
In both portfolios, Impax employs a proprietary sustainability lens and integrated risk management tool that analyzes material environmental, social and governance risks.
Ian Simm, Founder and Chief Executive at Impax, said in a statement: “The transition to a more global sustainable economy is creating tremendous opportunities and new risks for investors. We are honored that NEI has chosen Impax to help provide Canadian investors with exposure to companies tapping into the rapidly growing Environmental Markets, as well as access to income from more sustainable and resilient bond issuers.
“Impax has a long track record managing equity and fixed income portfolios positioned to deliver balanced returns for our clients in addition to generating tangible positive impacts for society, business and the environment.”
