Endowus is the first digital wealth advisor to launch multi-asset ESG investing offerings for retail investors in Asia
Endowus embraces Singapore’s Green Finance Hub aspirations, by launching Asia’s first digital multi-asset Environmental, Social, and Governance (ESG) portfolios, to pave the way for retail investors to gain access to better sustainable investing options.
Endowus’ ESG offering comes on the back of Singapore’s launch of a concerted national drive towards a more sustainable future. This move is illustrated by the Monetary Authority of Singapore (MAS)’s commitment in 2019 to invest US$2 billion to establish Singapore as a global hub for sustainability and green finance. This was followed by the nation’s October 2020 launch of the Singapore Green Finance Centre, a public-private partnership led by the MAS to develop a sustainable investing ecosystem in Asia—all contributing towards the Republic’s sustainability blueprint, Singapore Green Plan 2030.
Investor demand aligned with national policy
The results of an Endowus survey of over 1,100 participants in Singapore have highlighted the fact that the nation’s drive towards sustainable investing is aligned with investor sentiment—there is strong and growing demand for more ESG investing options in Singapore.
Yet while results indicate that ESG investing resonates with over 93 percent of respondents, only 28 percent currently hold any ESG funds. Probing deeper, the responses clearly illustrate some common themes behind investors’ hesitation to fully embrace ESG funds: 58 percent of respondents acknowledge a lack in their own understanding or knowledge of ESG investing, while 43 percent pointed to a lack of good available options as a key hindrance.
Complementing Endowus’ long-term focus on financial literacy and investor education, the newly launched Endowus ESG Portfolios are aimed at addressing these key issues while meeting growing investor interest in investing sustainably and fostering positive change—both of which also support Singapore’s national policies.
Endowus’ new globally-diversified ESG portfolios offer industry-leading funds—selected through a stringent due diligence process—from award-winning fund managers. The funds represent the best-in-class among ESG equity and fixed income options, with lowered fees previously only available to institutional investors. Fund managers include J.P. Morgan Asset Management, Natixis Investment Managers-Mirova, PIMCO, Schroders and UOB Asset Management-Robeco.
“We are proud to be Asia’s first digital wealth advisor to launch multi-asset ESG offerings, empowering individual investors to secure a better financial future for themselves while also making a positive impact on society and the planet,” said Endowus Chief Investment Officer, Samuel Rhee.
“We have implemented a robust due diligence process on the selection of funds and fund managers, so investors are provided with only the best ESG products. The resulting new ESG portfolios are a great example of the close partnership it takes, with top global fund managers, to bring an industry-leading offering to market.”
“We are pleased to partner with Endowus in their ambition to provide best-in-class ESG solutions. Schroders has had a dedicated sustainable investment team for over 20 years, and we have invested significantly in developing resources and proprietary tools to help our investment teams better quantify, analyse and account for the threat that ESG risks pose to portfolios,” said Susan Soh, Singapore CEO and Co-Head of Asia Pacific, Schroders.
“Singapore is home to Schroders’ regional Centre of Excellence for Sustainability, and so we are delighted to see more sustainable solutions offered to investors here, who have always been forward-thinking and are becoming more conscious about the ESG impacts of their investments.”
Why this matters to Singapore investors
Endowus’ offerings now provide Singapore investors unique access to ESG, sustainable, and climate funds—for both equities and fixed income—from the world’s top fund managers. ESG funds have historically been expensive and out of reach to individual investors, especially in Singapore. Through the new ESG portfolios, Endowus provides access to new SGD-denominated funds and lower-cost share classes for all investors—while remaining committed to 100% trailer fee rebates to ensure the lowest possible cost. These ready-made Endowus ESG portfolios provide investors with the same Endowus digital experience centred on better advice and greater access.
With ESG funds entering mainstream investing, there are various ESG scores, ratings and frameworks to evaluate investment products, but these methodologies may not be consistent or adequately robust. To address this additional complexity that layers on top of an already complicated personal investing decision, the Investment Office at Endowus helps investors cut through the noise—and the potential greenwashing—and selects the best-in-class funds from those fund managers with proprietary and sophisticated methodologies in screening for higher quality ESG companies.
"We are excited to partner with Endowus on the launch of the Endowus ESG offering, which incorporates important long-term trends such as sustainable investing and digital innovation. The diversified portfolio will provide investors with the opportunity to grow their investments through time, while having their assets fully aligned with their broader ESG goals." said Sherene Ban, CEO JPMorgan Asset Management (Singapore) Limited.
With Endowus, sustainable investing can now go hand-in-hand with performance
“Natixis Investment Managers is delighted to partner with Endowus as part of its multi-asset ESG offering. With ESG investing growing in momentum and adoption in Asia, it is important that access to ESG products is made at an affordable cost and over a convenient medium, said Madeline Ho, CEO, Natixis Investment Managers, Singapore.
“This accessibility will help investors better understand and integrate ESG investing, and in particular, for investors who are starting their investment journey and are increasingly aligning their investment decisions with their social beliefs.”
Making a positive impact does not mean compromising returns. Backtesting against recent historical data indicates that the Endowus ESG portfolios would have significantly outperformed comparable non-ESG indexes over the last year, as illustrated below (source: Endowus Research, Bloomberg).
Growing global demand for ESG Funds and alignment from the investment industry
Economic progress has fuelled global growth, but in the process, businesses have placed the environment under stress. Meanwhile, both developed and emerging markets globally are experiencing rising economic inequality and social injustice. To address these challenges, sustainable investing seeks both positive returns and long-term positive impact on the environment, society and the standards under which businesses operate.
“Climate change has become a global priority as risks and realities mount. PIMCO believes fixed income investments have a uniquely important role in financing the transition to a net zero carbon economy, with the potential to also deliver attractive returns for investors. Recognizing that climate change will have a profound impact on the global economy, financial markets and issuers, we have developed tools and methods that over time seek to incorporate material climate risk evaluations in our investment research processes,” said Kimberley Stafford, Head of PIMCO Asia-Pacific.
“PIMCO GIS Climate Bond Fund is our first dedicated climate bond strategy and we are pleased to partner with Endowus in offering this ESG-focused strategy to investors who seek to achieve positive financial returns while supporting the transition to net zero carbon emissions.”
Endowus Chief Executive Officer, Gregory Van is looking forward to playing a part in empowering more investors in Singapore to embrace investing in a brighter future for all.
He said: “It is clear that the world is now turning its eye to investing in better outcomes for the planet and its people, but ESG investing is often seen as being too complex and unapproachable for the average investor. Investors can do their part for a better future for us all—and it doesn’t have to come at the expense of performance at all. Endowus aims to help investors cut through the noise to find the best-in-class ESG offerings, as we have done with our other CPF, SRS and cash investment solutions.”
Van was pleased to have established partnerships with many trusted organisations with a long history of providing quality investment solutions.
“We are delighted to partner with Endowus for our United Sustainable Credit Income Fund. The fund’s investing approach is aligned with the UN Sustainable Development Goals (SDGs) and as more investors in the region look for impact investment options with a trusted Asian asset manager, UOBAM will continue to sharpen our ESG capabilities and to partner with Endowus to provide more investment solutions that balance investment returns with ESG outcomes," said Thio Boon Kiat, CEO of UOB Asset Management.
For more information, visit https://endowus.com/esg-investing.