NGS Super has become the first super fund to invest in a low-carbon portfolio designed by global asset manager AllianceBernstein.
The AB Managed Volatility Equities – Green strategy, launched in December 2018, is a unit class of the AB Managed Volatility Equities Fund. The strategy is based on the view that a well-constructed portfolio of low-volatility shares may not only limit losses in a portfolio but may also outperform the market over the long term.
NGS Super has invested approximately $170 million in the Green MVE strategy, which aims to achieve a positive impact on climate change all while delivering attractive investment returns.
NGS Super chief executive Laura Wright, said investment in the strategy was in line with the fund’s overarching aim to deliver the best risk-adjusted returns in a way that reflects the values and attitudes of their organisation and members.
“We’re committed to sustainable long-term investment options that work to give our members the best retirement outcomes and this strategy speaks directly to that goal,” she said.
“Our investment in Green MVE is a way for us to reduce the carbon intensity and risk of our portfolio without impacting the expected returns of our members. Overall, we believe considering a cost of carbon in the investment process helps reduce the risks associated with climate change and supports in the broader transition to a low-carbon economy.
“AllianceBernstein’s innovative approach of measuring carbon emissions and directly engaging with Australian companies brings a raft of benefits.”
Ms Wright added that direct engagement with companies helps drive innovative change from within to better climate outcomes and provides a deeper analysis of the climate-related risks in the super funds’ broader Australian equity portfolio.
AllianceBernstein’s chief investment officer – Australian equities, Roy Maslen, said the investment by NGS Super was the first step in promoting change within companies to drive better climate outcomes.
“We’re delighted to have the support of a fund like NGS Super, whose shared desire to provide long-term investment options that produce broad environmental and social benefits for their members aligns directly with the core values of this strategy,” he said.
“Green MVE provides an opportunity for investors who want to lower the carbon footprint of their portfolio and invest in a more environmentally responsible way to do so, without risking their ability to still gain returns.
“We want to shift the perception and show investors that they can still achieve significant investment performance while working to lower the carbon footprint in their portfolios.”
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