A multi asset approach to sustainable investing

Investing responsibly, in opportunities that can help protect the environment and which provide benefits to society at large.
A multi asset approach to sustainable investing

Sustainability has become a key item on the agenda of governments, institutions, corporates and private investors, large and small. Accordingly, those investors now increasingly want to commit their money to funds that aim to achieve attractive financial returns, at the same time as generating good financial outcome and avoiding harmful effects on society and the environment. In light of that, sustainable investing has developed significantly in recent years, building on decades-old ethical-investing principles, which were typically exclusions-based and often rooted in underlying beliefs. 

In the past, sustainable investing may have been seen as a niche approach, accessible only by large institutional investors. However, it has now moved into the mainstream, and we believe it should be open to all investors, regardless of the amount they invest. 

The nature of some of the asset classes may make them less accessible for some investors. This may be due to the large scale required for each individual asset or because of limited liquidity. Examples might include green bonds (bonds where the proceeds of their sale are dedicated to sustainable activities) where the universe is relatively small, or green infrastructure, which may be less liquid and involve a longer time commitment. Investing through a fund is likely to allow investors of all sizes the opportunity to gain access and liquidity.

I want to invest responsibly, investing in opportunities that can help protect the environment and prevent its further harm, and which provide benefits to society at large, while also reducing the detrimental impact some investments might have.”

Maria Municchi, Fund Manager, M&G Sustainable Multi Asset Fund

Why take a multi-asset approach?

Valuation is key, so taking a multi-asset approach allows an investor to capture value across a wide range of asset classes, diversifying risk at the same time. Access to different types of sustainable investments with different risk/reward characteristics may be able to reduce the overall volatility of returns. This is because one asset class may provide some offset should another asset class suffer from market weakness.

In addition to mitigating the financial risks, providing the broadest potential universe of accessible asset classes may also increase the overall sustainability of the portfolio from an ESG and impact perspective. For example, compared to equities, green infrastructure may offer a steady income and lower volatility, and do so while also making a positive contribution to renewable energy generation.

M&G Sustainable Multi Asset Fund

The M&G Sustainable Multi Asset Fund’s approach integrates the benefits of diversified asset allocation with a responsible investment approach aiming to deliver attractive long-term total returns, while considering environmental, social and governance factors. This strategy enables investors to align their financial and sustainable goals, providing an ideal opportunity to contribute towards a more sustainable future.

The value and income from the fund’s assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.

The fund allows for the extensive use of derivatives.

Videos and Literature

Maria Municchi, fund manager and Jim Henning, Dynamic Planner’s Head of Investment Services, discuss sustainable investing.

A short animated video explaining how we apply our multi-asset process to sustainable investing.

Fund manager, Maria Municchi, describes the objectives of the M&G Sustainable Multi Asset Fund, the investment philosophy behind the fund.

Fund profile

                 

Download
pdf-image

Glossary of Responsible Investment terms

                          

Download
pdf-image

Issued by M&G Asset Management

For financial advisers only. Not for onward distribution. No other persons should rely on any information contained within. This financial promotion is issued by M&G Securities Limited which is authorised and regulated by the Financial Conduct Authority in the UK and provides ISAs and other investment products. The company’s registered office is  10 Fenchurch Avenue, London EC3M 5AG. Registered in England and Wales. Registered Number 90776.