Investment Office Monthly Fund Digest (August 2024)

Sustainable funds have seen tremendous growth in recent years. As of early 2024, sustainable funds managed over US$2.9 trillion in assets, according to Morningstar. This represents a rapid expansion from a relatively small base in prior years.

Integrity and transparency of ESG funds are of paramount importance, which is part of the scrutiny Endowus Investment Office performs to ensure that fund claims are carefully vetted to ensure their investments truly align with their sustainability objectives while having merit as investments.

To assist with navigation, we are gathering a list of seven funds on Endowus Fund Smart that offer high-quality and responsible equity exposure for global, emerging markets, and Asia. 

The curated list of sustainable and impact funds are:

1. Stewart Investors Global Emerging Markets Sustainability Fund
2. Stewart Investors Asia Pacific Sustainability Fund
3. Nordea 1 - Global Stars Fund
4. Nordea 1 - Global Impact Fund
5. KBI Global Sustainable Infrastructure Fund
6. Ossiam Shiller Barclays CAPE US Sector Value Fund
7. Goldman Sachs North America Enhanced Index Sustainable Equity

Asia equities

Stewart Investors Asia Pacific Sustainability Fund

ISIN: IE000UZ79C24 (SGD, Cash/SRS), IE000BK27P89 (USD, Cash)

The Stewart Investors APAC Sustainability Fund offers attractive and stable returns with solid downside protection. The portfolio is quality-driven and all-cap in nature, with a notable tilt towards Indian equities, resulting in a differentiated portfolio.

The Fund has consistently outperformed the MSCI AC Asia Pacific ex-Japan Index while demonstrating the lowest volatility, lowest downside capture, and highest Sharpe ratio relative to peers. Its investment process focuses on high-quality companies with strong leadership and resilient businesses, avoiding those linked to harmful activities and emphasising sustainable development. This makes the fund appealing to investors seeking a conservative Asia equity allocation with strong ESG credentials and robust long-term returns.

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Emerging market equities

Stewart Investors Global Emerging Markets Sustainability Fund

ISIN: IE000P5M9KF7 (SGD, Cash/SRS), IE000AQHA357 (USD, Cash)

The Stewart Investors Global Emerging Markets Sustainability Fund stands out for both ESG and non-ESG investors. The fund boasts impressive performance in emerging markets. 

Since its launch in 2009, the Fund has delivered attractive performance, consistently outperforming the MSCI Emerging Market Index. Coupled with its exceptional downside protection, this makes it an appealing option for investors seeking emerging market strategies with high risk-adjusted returns.

The Fund’s success is attributed to its careful selection of high-quality companies led by trustworthy management teams committed to creating value for stakeholders, both on a financial and ESG level.

Managing approximately USD 18 billion across various mandates, Stewart Investors has applied this investment philosophy successfully since the 1980s by building long-term relationships with companies and developing high conviction in them.

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Global equities

Nordea 1 - Global Stars Equity Fund

ISIN: LU2800639671 (SGD, Cash), LU0985320562 (USD, Cash)

The Nordea 1- Global Stars Equity Fund offers a strategic pathway to global equities, leveraging a rigorous, ESG-focused bottom-up investment approach that distinguishes Nordea Asset Management as a leader in responsible investing. Anchored in the belief that companies adhering to superior ESG standards are poised for long-term success, the fund crafts a portfolio with limited style biases and a notably higher ESG profile compared to its benchmark.

With two seasoned portfolio managers boasting 44 years of combined experience and a dedicated team of analysts, the Fund has maintained consistent performance in alignment with its benchmark, effectively managing both upside potential and downside risks. This structured approach and strong ESG commitment make the Nordea Global Stars Equity Fund an appealing choice for investors seeking responsible global equity investments.

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Nordea 1 - Global Impact Fund

ISIN: LU2355687059 (USD, Cash)

The Nordea 1 - Global Impact Fund stands out for its commitment to companies with strong growth prospects and a positive societal or environmental impact, taking investing a step further than typical ESG practices. 

The Nordea 1- Global Impact Fund is an SFDR Article 9 fund, also called “dark green” funds, demonstrating a sustainable investment objective. This is in contrast to the “light green” Article 8 funds, which promote ESG characteristics without sustainability as their core objective.

The Nordea Fund targets investors eager to support businesses actively working towards bettering the world, rather than just those with ESG-friendly practices. It diversifies its investments across four main areas: Health and Wellbeing, Inclusion and Opportunity, Sustainable Living, and Low Carbon Economy, covering a range of sub-themes from Health Science to Clean Mobility.

Co-portfolio managers for the Fund, Thomas Sorensen and Henning Padberg are renowned for their successful Global Climate & Environment strategy. The investment team, supported by dedicated ESG and Impact analysts, not only selects companies for their current impact but also engages with them to enhance their long-term positive contributions, demonstrating a deep commitment to delivering both financial returns and real-world impact.

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Global infrastructure equities

KBI Global Sustainable Infrastructure Fund

ISIN: IE00BN6Q9V67 (SGD, Cash/SRS), IE00BN6Q9X81 (USD, Cash)

The KBI Global Sustainable Infrastructure Fund offers a unique investment focus by targeting forward-looking and underallocated infrastructure that addresses resource scarcity in the water, food, and energy sectors. Managed by an experienced and cohesive team of nine investment professionals who have specialised in infrastructure and natural resources for over a decade, the fund leverages KBI Global Investors’ expertise in sustainable infrastructure investments, a speciality since 2001.

This Fund stands out for its defensive characteristics, providing downside management and inflation protection similar to its peers while offering more impact-oriented and forward-looking exposures. With a concentrated portfolio of 30-60 holdings, the fund is ideal for investors seeking exposure to listed infrastructure with a bias towards smaller companies. However, due to its sector-specific focus, it is advisable for investors to diversify their overall portfolio.

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US equities

Ossiam Shiller Barclays CAPE US Sector Value Fund

ISIN: LU2743150752 (SGD, Cash), LU2743106184 (USD, Cash)

The Ossiam US Large Cap Equity Fund offers investors targeted exposure to the US large cap equity market with a value-oriented approach. Utilising the Cyclically Adjusted Price-to-Earnings (CAPE®) ratio, developed by renowned economist Dr. Robert Shiller, the Fund aims to identify and invest in potentially undervalued sectors. Managed by a team of 10 investment professionals at Ossiam, an affiliate of Natixis Investment Management specialising in systematic and quantitative strategies, the Fund has demonstrated strong performance since its inception, consistently outperforming its benchmark across various market cycles.

The Fund's strategy involves selecting the five most undervalued sectors based on their Relative CAPE Ratios, excluding the sector with the lowest 12-month return, and equally weighting the remaining four sectors in the portfolio. However, investors should be aware of the fund's risk profile, as the Fund is a single-country, 100% equities portfolio that can experience periods of heightened volatility.

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Goldman Sachs North America Enhanced Index Sustainable Equity

ISIN: LU2715298308 (SGD, Cash), LU2037301442 (USD, Cash)

The Goldman Sachs North America Enhanced Index Sustainable Equity distinguishes itself by integrating a comprehensive ESG process into its passive investment strategy, enhancing the sustainability characteristics of the portfolio. Unlike other passive ESG approaches that either minimally exclude certain companies or rely on predefined sustainable indices, this Fund employs a sophisticated, in-house developed ESG screening process while closely tracking the MSCI North America Index. This dual focus ensures both improved ESG outcomes and minimal tracking error, providing a balanced approach to passive ESG investing.

The Fund is run by NN Investment Partners, which was acquired by Goldman Sachs in 2022. With over 20 years of experience in sustainable investing, NNIP’s fund management expertise has delivered a tracking error within the 1.5% target, offering a competitively priced option for investors seeking passive exposure to the MSCI North America Index with enhanced sustainability. However, given the regional focus, investors are advised to diversify their holdings across other regions and asset classes for a more resilient portfolio.

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Customise your portfolio in minutes with Endowus Fund Smart

Whether you’re looking to invest your cash, CPF, or SRS, there’s something for everyone at Endowus. Want to explore the funds available on our Fund Smart platform? Refer to our investment funds list here in a single glance. 

The Endowus Fund Smart platform comes with wide currency selection and dividend payout options. These give you more flexibility and information in selecting your own funds and building your own portfolios. You can transfer your funds from other banks or platforms into Endowus.

Customise your ideal investment portfolio in minutes with Fund Smart. The Endowus Fee for Single Fund Goals via Fund Smart (Cash, CPF, and SRS) is 0.3% p.a., reinforcing our commitment to reduce the cost of investing. This pricing means that more than 95% of the funds are now cheaper on Endowus than on any other fund platform, bank, private bank, financial advisor, or broker in Singapore. 

Not sure how to invest with Fund Smart? Find out everything you need to know in our FAQs. 

For those who are looking for an ESG-aware core allocation, our Investment Office recently made enhancements to the ESG Portfolios. 

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*Annualised returns are calculated based on the returns of the target share class, and the oldest share class of the fund where the target share class is younger than three years. Three-year returns are based on the period from August 2021 to July 2024 unless otherwise stated. Returns are translated into SGD (except for non-SGD funds) and are net of fund-level fees. 

**Where a fund or portfolio has both SGD and USD share classes, the fees of the SGD share class are shown. Total portfolio and fund-level fees include fund total fund-level fees.

***Endowus does not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Fee.

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