Schroders partners with HSBC in Singapore on ESG multi-asset fund

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Schroders partners with HSBC in Singapore on ESG multi-asset fund

Schroder Investment Management (Singapore) today announced the launch of Schroder ISF Sustainable Multi-Asset Income (SMAI), a multi-asset fund for which HSBC Singapore is the exclusive distribution partner.

Schroders said it is one of the first asset managers globally to launch a new multi-asset fund that is focused equally on delivering income and sustainability outcomes. The strategy is attractive in the current environment as investors need to contend with the dual challenges of persistently low yields and an increased urgency to prioritise rising sustainability risks heightened by the global pandemic and recent climate events.

Lily Choh, Schroders' deputy CEO, Singapore and head of distribution, South-East Asia, commented: "The pandemic has sharpened focus on environmental, social and governance (ESG) risk with recognition amongst investors and institutions over how these factors are becoming increasingly material to investment outcomes. The findings from Schroders' latest Global Investor Study reinforce this belief: 43% of investors in Singapore now frequently invest in sustainable investment funds, a marked increase from 31% two years ago.

The current crisis has put sustainable investment in the forefront of investors’ minds with growing evidence that sustainable business models are more resilient and better able to withstand market shocks".

"Sceptics have long argued that growing interest in sustainability would not be supported as markets become more challenging. On the contrary, the current crisis has put sustainable investment in the forefront of investors' minds with growing evidence that sustainable business models are more resilient and better able to withstand market shocks. For investors seeking income, this challenges the notion that there needs to be a trade-off and you must forgo attractive income if you are investing sustainably."

"Since 2000, we have engaged actively with management teams to promote more sustainable business practices and have driven change in the industry through a number of investor initiatives, such as pushing for greater transparency and disclosure on sustainability-related risks and opportunities."

Schroders has had a dedicated sustainable investment team for over 20 years. Today, the team has 22 members, and Schroders has achieved an A+ rating for overall strategy and governance in relation to sustainable investment for the fifth year running by the Principles for Responsible Investment (PRI), an influential United Nations-backed global investor initiative.

"We are very pleased to partner exclusively with HSBC Singapore for the distribution of this fund, given our shared commitment to sustainability and in making sustainable investing more accessible to all investors in Singapore," Choh added. 

HSBC customers will be able to invest in Schroder ISF Sustainable Multi-Asset Income with as little as SGD1,000. The fund's base currency is in euro, but Singapore dollar-, US dollar- and Australian dollar-hedged classes are also available to investors.

The fund aims to deliver a natural base level of income of 3 to 5% p.a. paid monthly, by investing across a diverse range of asset classes and regions, including investments that target better sustainable outcomes like carbon neutral equities and green bonds. The fund's SGD, USD and AUD hedged share classes most recently delivered an annualised payout of 4.5%.

With 95%1 of investors in Singapore requiring more information on the sustainability aspects of their investments, a differentiating feature of the fund is that Schroders produces in-depth reports with different sustainability lenses, from the fund's carbon profile to positive characteristics relative to the United Nation's Sustainable Development Goals, to provide greater clarity and insight to clients on the impact of their investments.

Many sustainability funds in the market rely on third party scoring or screening for ESG analysis, but ratings across different agencies can be inconsistent and are typically backward-looking. Schroders has developed a suite of innovative proprietary tools using a vast traditional and non-traditional data set to improve on the conventional ways of ESG measurement. Schroders' SustainEx investment framework, which quantifies the hidden costs of companies' social and environmental impact, was recently awarded first place for Impact Reporting and Impact Measurement in the Environmental Finance IMPACT Awards 2020

Ian Yim, head of Wealth and International, HSBC Singapore said: "ESG issues continue to play a key and integral part in how we unlock sustainable investment opportunities for our clients. Recent global climate events have further heightened the urgency for our customers to pivot towards a more sustainable future - not just in terms of how they live, but also how they can invest responsibly."

Yim added: "HSBC's commitment to furthering sustainability includes pledging US$100 billion globally in sustainable financing and investments by 2025.  While closer to home, we plan to expand our range of sustainable investment products and solutions offered to customers across the wealth continuum."

"The Schroder ISF Sustainable Multi-Asset Income fund, being one of the first of its kind in the market, compliments our range of ESG fund strategies. This fund balances our customers' search for yield amidst the current low interest rate environment and their desire to make a difference to our environment. In addition, Schroder's overall resources and expertise in the ESG space gives added assurance to our clients that their funds are being channelled to companies that are aligned to their beliefs."

Author spotlight

Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.