UniSuper's Global Environmental Opportunities (GEO) investment option will switch from a passive to an active approach, with UniSuper's in-house team assuming responsibility for its performance.
The option will now adopt an active management approach using the MSCI ESG Research Sustainable Impact Metrics database.
Some of the top holdings in the $357.5 million investment option include Tesla and wind energy company Vesta Wind Systems.
Speaking to InvestorDaily, UniSuper governance and sustainable investment manager Talieh Williams said the time had come to review the approach of the GEO option.
“Over the last five years we had developed a really good understanding of the underlying index (and some of its limitations) and felt that we could further refine and enhance the approach that we had in place,” Ms Williams said.
Bringing the GEO option in-house would allow UniSuper to “exercise greater control from a portfolio construction process, she said.
The internalisation of the GEO fund management would bring members a number of benefits, including reduced stock concentration, greater ability to consider broader ESG and investment considerations, better liquidity management, and the ability to target a portfolio average of 75 per cent revenue exposure from the targeted investment themes, Ms Williams said.
The shift from passive to active management was a reflection of member demand for investment options that would align with their interests and beliefs, Ms Williams said, and the GEO option was just one of three sustainable options offered by UniSuper.
“UniSuper has always had a highly engaged membership base that is focused on ESG and sustainability – our members coming from the higher education sector are probably the most engaged membership base in Australia,” Ms Williams said.
“Accordingly, for us, the demand has been stable (at a high level) for a long time, well over a decade.”
