Dubbed as the AXA IM Global Green Bond Fund and AXA IM Clean Economy Equity Fund, they will join the firm’s existing flagship Sustainable Equity Fund that was initially launched in 2014 – together offering investors clear choices in new ways to support clean energy solutions.
Already spruiking a collective portfolio of assets under management valued at $1.38 trillion as of the end of 2021 globally, AXA IM is eager to capitalise on the potential investment opportunities available within the expanding renewable energy sector.
It’s an attractive option for savvy investors keen to profit from a sector that’s continually billed as one with exceptionally high expectations of growth as government and industry shoot for a net zero economy by 2050.
According to AXA IM, the Global Green Bond Fund will operate off the back of the firm’s existing AUD$20 billion worth of green bonds, which have increasingly attracted the attention of investors involved in the decarbonisation of their assets.
AXA IM expects this fund will work by using a proprietary green bond framework, with investments made in “eligible green bonds” with issuers that have an overall sustainability strategy consistent and aligned with green bond projects.
The firm wants these investments to demonstrate a “positive environmental impact” by financing the energy and ecology transition.
It also expects to use the underlying fund to support a number of the United Nations’ Sustainable Development Goals by investing across four main sub themes – low carbon transport, smart energy, green buildings and sustainable ecosystem.
AXA IM portfolio manager, Johann Ple expects the green bond market to grow in excess of €600 billion this year “and as it does, become even more attractive to investors.”
Both funds use a ‘master-feeder structure’, and the AXA IM Clean Economy Equity Fund has two tasks to accomplish through delivering long-term investment growth, as well as a “positive and measurable” impact on the environment.
It’s designed to be used as a catalyst for investors to manage portfolios in “high quality, growth-oriented” companies operating in key investment areas impacted by the shortage in natural resources.
The fund also supports the UN’s environmental goals, providing a high conviction portfolio of typically 40 to 60 listed equity and equity-related securities of companies in the clean economy.
According to AXA IM, these global companies are largely focused on energy transition and resource optimisation such as low carbon transport, renewable energies, responsible agriculture, food, water protection, natural resource preservation and recycling and waste reduction.
AXA IM portfolio manager, Amanda O’Toole said the underlying fund invests in public-listed companies that have high potential for growth as they support, through innovative solutions, the drive towards decarbonisation and resource optimisation, as well as the decrease in waste and pollution.
Alluding to the broader ramifications of humanity’s long-term survival, Ms O’Toole said investors are demanding more of companies to respond to the need for change.
“We believe businesses that continue to innovate and invest in solutions and enabling technology to present the best growth opportunity and potential to deliver positive impact towards our transition to a net zero world,” Ms O’Toole said.
And with ESG brought to the forefront of how investors consider where their money goes, AXA IM Core, Australia’s head of client group Michelle Lacey noted there’s been “incredible growth” in responsible investing in Australia.
“Investors are increasingly seeking to expand their portfolios beyond core equities with ESG integration by taking advantage of the growing diversification and liquidity in the global green bond market,” Ms Lacey said.
She said the two new funds underpin the firm’s commitment to invest responsibly and provide Australian investors the potential to deliver more sustainable financial returns over the long-term based on “our long, established responsible investing expertise”.
“We expect the global economy will move to a more sustainable and equitable model over the coming years, and we want to be an active partner for Australian clients as that transition takes place.”
“It’s important to consider how we, as responsible investors, can promote positive change for the present and the future of our people and planet,” she added.
