E Fund and State Street in new environmental China A share strategy
The new strategy is designed to help investors integrate environmental scoring into their Chinese equity portfolios
E Fund Management, China's largest mutual fund manager, and State Street Global Advisors, the asset management arm of State Street Corporation (NYSE: STT), has announced the co-development of a new environmental China A share strategy, State Street – E Fund Environmental Driven China A Strategy.
State Street Global Advisors and E Fund, both among the largest asset managers in their respective markets, have been supporting their clients to increasingly integrate sustainable and responsible investing in their portfolios. Companies with higher environmental, social and governance (ESG) scores and ratings can outperform comparable firms in different aspects, offering long-term value to investors (Morningstar Sustainable Investing Research, November 2016). The new strategy is designed to help investors integrate environmental scoring into their Chinese equity portfolios. The strategy incorporates a bottom-up construction approach by combining sustainability metrics from a number of data providers with a focus on companies which are more carbon-efficient, generate higher green revenues, and have better environmental policies.
"We are delighted to announce a new environmental strategy for the China A share market with State Street Global Advisors to address the growing investor demand," said Sau Kwan, president of E Fund. "While the concept of green development is embodied in all areas of economic and social development in the 13th Five-Year plan, the idea of environmental investing has recently raised a strong awareness and support from both government authorities and leading corporations in China. As an early adopter of ESG investment, we believe incorporating these factors in our investment processes will bring long-term value to our investors and create sustainable impact to our industry. With increased interest in ESG from Chinese investors, E Fund is keen to continue its fulfilment on ESG principles as a responsible asset manager."
"We are excited about our collaboration with E Fund," James MacNevin, head of Asia Pacific, State Street Global Advisors, said. "ESG investing is central to our mission of investing responsibly to enable economic prosperity and social progress. Over 25% of the world's professionally managed assets came from sustainable investments (GSIA, Global Sustainable Investment Review 2016), reflecting a shifting economic landscape where investors are looking for ways to put their capital to work in a more sustainable way, addressing their financial goals and responsible investing needs. Our heritage in ESG investing dates back to the launch of our first active ESG strategy in 1985. We believe our more than 30 years of experience in ESG investing, combined with E Fund's local expertise, will facilitate the development of sustainable investments in the China market."
State Street Global Advisors and E Fund are signatories to the United Nations Principles for Responsible Investment, sharing the same desire to incorporate ESG principles in their investment approaches. In January 2017, E Fund Management and State Street Global Advisors signed a memorandum of understanding to jointly explore strategic opportunities across global markets, including China's fast-growing fund management industry.