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Three trust picks for ESG portfolios

Biotech trusts top performance charts in February

Three trust picks for ESG portfolios

Which products get the green light from investors?
Lauren Mason, Investment Week, 18 February 2020

ESG investing has been a major theme among open-ended fund managers for quite some time, with both asset managers and asset allocators increasingly taking steps to minimise their carbon footprint, reduce sustainability risks and maximise the positive social impacts of their portfolios…

But while there has been less fanfare regarding ESG in the closed-ended space, there are plenty of positive changes occurring in the investment trust world, according to The AIC’s Annabel Brodie-Smith…

“Investment companies have pioneered investing in renewable energy infrastructure, green technologies and social housing. Investment companies’ closed-ended structure makes them a natural home for these hard-to-sell assets.”

Given ESG investing in the closed-ended space has arguably fallen under the radar relative to their open-ended counterparts, Investment Week asked three investment professionals for their top ESG trust picks.

William Heathcoat Amory, head of research at Kepler Trust Intelligence

Pick: Impax Environmental Markets…

 

James Carthew, director at Marten & Co

Pick: Montanaro European Smaller Companies

There are obvious environmental funds, such as Bluefield Solar Income and JLEN Environmental Assets. However, I would mention Montanaro European Smaller Companies.

ESG analysis is embedded in the manager’s investment process. The manager has an internal ESG committee that meets quarterly and oversees its efforts in this area. Montanaro Asset Management Limited (MAML) also has its own handbook, policies and checklists.

Some sectors are excluded from portfolios on ESG grounds. MAML portfolios will not contain tobacco companies; companies manufacturing weapons, facilitating gambling or manufacturing alcohol; companies engaged in oil and coal-related exploration and production; companies involved with pornography; and those making high interest-rate loans.

Corporate governance checks include an assessment of a company’s remuneration policy.

Darius McDermott, managing director at Chelsea Financial Services

Pick: Foresight Solar…

 

Read more here

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