Late last week, Asset Allocator caught wind that green allocator EQ Investors had launched a new range of sustainable solutions.
So we thought we’d sit down with co-manager Tertius Bonnin to hear more about what’s beneath the bonnet and how it fits in with their wider proposition.
EQ’s ‘Sustainable World’ range brings together a mixture of their existing three MPS products: an active impact range, a passive index range, and a low-carbon leaders range.
The first two will continue as standalone products, while the third will wind down to make way for this new blended solution that incorporates elements and existing fund holdings from all three.
“We are catering to a spectrum of investors — our impact portfolios are for those really ambitious, deep-green clients, and we then have our passive portfolios, which are our lighter-green people just wanting to step into sustainability in some way,” he said.
For some onlookers, it may seem a somewhat gloomy time to be launching a sustainable portfolio given the wider travails of the sector and the presence of Donald Trump, who will determine America’s ESG policies — or lack of them — for the next four years.
Bonnin, however, is “not as pessimistic” as others in the space, as he believes it’s primarily large companies that will drive change, rather than executive orders.
Product design
EQ’s reputation as a leader in the space allows them to help asset managers design new ESG funds and bring them to market.
On Schroder Global Sustainable Value, he said: “We were there at launch, and we helped get the product off the ground.”
Indeed this particular fund has grown to become the single most popular fund among sustainable allocators in our database with a whopping 13 holders.
Before wrapping up, Asset Allocator put one more question to Bonnin on whether he sees private asset funds, including Ltafs, as one day entering sustainable client portfolios.
For context, proponents of Ltafs have said these structures as central to the green transition. Schroders launched the first energy transition Ltaf in 2023 — and we asked whether EQ would one day include private assets in portfolios for its MPS clients.
“No — there’s questions on liquidity and client suitability,” he said.
“There should be a healthy element of scepticism to private assets from the wealth space with Woodford and the whole saga not that long ago.
“That should be etched in a lot of people’s memories of the risks of trying to match up illiquid assets to more liquid fund structures.”
