Russell Investments Low Carbon Global Shares Fund - Class AUDH

Product Name

Russell Investments Low Carbon Global Shares Fund - Class AUDH

Issuer

Russell Investments

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale

Certified Since

2017

Asset Classes

International equities

Markets

Australia

Investment Approaches

Sustainability themed, ESG Integration

It Includes:

  • Riaa icons 10 Renewable energy and energy efficiency
  • No inclusions5 No specific themes
  • Investment2 More sustainable companies

It has some level of screening for:

  • Riaa icons 36 Armaments
  • Riaa icons 33 Fossil fuels
  • Riaa icons 50 Nuclear power
  • Riaa icons 35 Tobacco

It fully excludes:

  • Riaa icons 36 Armaments
  • Riaa icons 35 Tobacco

Overview

The Fund is designed to provide access to a broad range of global shares, in developed and emerging markets, with a reduced exposure to carbon emissions and fossil fuel reserves by 50% compared to its benchmark. The Fund goes beyond carbon reduction alone, aiming to provide an increased exposure to renewable energy, an improved aggregate ESG profile and a targeted reduction in coal exposure. The investment team uses a systematic portfolio construction approach beginning with the MSCI All Countries World Index (ACWI) ex Australia. The team is then able to tilt the portfolio away from companies with high exposure to carbonintensive activities and increase weighting in those companies with positive ESG characteristics, as well as those involved in the development of renewable energy. The Fund applies asset, sector, industry and country constraints and minimises active share to effectively deliver low tracking error. This portfolio construction process negates unintuitive outcomes that can


Description


The Russell Investments Low Carbon Global Shares Fund is an enhanced passive / smart beta fund that uses a sytematic portfolio construction approach, starting with the MSCI All Countries World Index (ACWI) ex Australia, and invests directly in global shares, in both developed and emerging markets.

The Fund utilises our proprietary decarbonisation strategy which aims to achieve the following relative to its benchmark (MSCI ACWI ex Australia):
- a 50% reduction in carbon Emissions;
- a 50% reduction in carbon reserves;
- a targeted reduction in coal exposure (through the exclusion of companies that derive more than 20% of their revenue from coal-related activities (ie companies with more than 10% of their revenue derived from mining thermal coal or more than 10% of their power generation from coal.  In addition to the above criteria, forward-looking information about a company’s overall positioning for an energy transition is considered); 
- an increased exposure to renewable energy; and 
- maintain or improve the portfolio's overall ESG score.

Additionally, the Fund strategy incorporates additional exclusion criteria in relation to companies involved with tobacco, nuclear weapons/Cluster munitions/ antipersonnel Mines,  and uranium.

The Fund applies asset, sector, industry and country constraints and minimises active share in order to deliver low tracking error (tartgeted at 0.5% p.a.).

The Fund's investment approach is sustainability themed in that it provides investors with a sustainable investment solution that supports the management of climate change risk and the transition to a low carbon economy. In achieving this outcome, the Fund considers the value and measure of carbon, green energy and environmental, social and governance (ESG) characteristics. Additionally, the Fund applies specific exclusions criteria in relation to coal, tobacco, nuclear weapons, and uranium that aligns with current responsible investment market trends.it should be noted that the Fund's sustainability approach is intended to evolve and adapt over time in order to reflect changing market conditions, albeit within a risk-controlled framework.

The Fund uses a hybrid approach to its investment / portfolio construction process, preserving the strengths of each of the following common approaches to portfolio decarbonisation - divestment, sector neutral reallocation and optimisation. Our approach includes optimisation, negative screens, negative and positive tilts and integrates ESG factors (ESG integration).

Other products certified by the Responsible Investment Association Australasia (RIAA)

Russell Investments Australian Responsible Investment ETF

Russell Investments Low Carbon Australian Shares Fund

Russell Investments Low Carbon Global Shares Fund

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