Asset management company AXA Investment Managers (AXA IM) has developed a fully-integrated environmental, social and governance (ESG) SmartBeta strategy.
The AXA IM All Country World Index (ACWI) SmartBeta Equity Fund will offer long-term investors an “efficient way of capturing equity market beta, while avoiding the limitations of both market cap-weighted indices and alternative weighting schemes”, according to AXA IM.
The fund is accessible via the Asgard platform and is powered by AXA Rosenberg, the quantitative investment arm of the global AXA IM group.
AXA Rosenberg's director of investment strategy, Kathryn McDonald, said while smart beta and ESG might seem unrelated, both approaches reflected a move by investors away from standard index tracking.
“Overlaying smart beta with ESG is quite a new and novel concept but it’s one we feel is a very positive step,” said Ms McDonald.
“Our extensive research shows ESG smart beta can offer investors a lower risk and higher return than index investing, along with a defensive strategy with improved diversification and ESG performance - an attractive concept for long-term investors.”
AXA IM said the SmartBeta capability of the fund extends to both developed and emerging markets via an ACWI ex-Australia benchmark, offering Australian investors a global equity smart beta exposure.
AXA IM's director of Australia and New Zealand, Craig Hurt, said a greater number of investors are now implementing smart beta strategies.
“Since bringing our SmartBeta credit and SmartBeta equity strategies to the Australian market, we’ve seen an increasing number of investors, both institutional and retail, look for a more intelligent and pragmatic approach to capture the market return,” he said.
“It’s exciting for Australia to be leading the charge on smart beta and ESG integration and that more investors, especially those in the post-retirement phase, can benefit from these types of solutions,” he said.
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