Russell Investments Low Carbon Global Shares Fund

Product Name

Russell Investments Low Carbon Global Shares Fund

Issuer

Russell Investments

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale

Certified Since

2017

Asset Classes

International equities

Markets

Australia, New Zealand

Investment Approaches

Sustainability themed

It Includes:

  • Riaa icons 10 Renewable energy and climate change solutions
  • Investment2 More sustainable companies
  • No inclusions5 No inclusions

It fully excludes:

  • Riaa icons 36 Armaments
  • Riaa icons 33 Fossil fuels
  • Riaa icons 50 Nuclear power
  • Riaa icons 35 Tobacco
  • No exclusions4 No exclusions

Overview

The Russell Investments Low Carbon Global Shares Fund ("Fund") provides investors with a sustainable investment solution that supports the management of climate change risk and the transition to a low carbon economy. The Fund aims to provide a total return, before costs and tax, in line with the Fund's benchmark over 3 year rolling periods, with a focus on reducing the Fund's exposure to carbon. The Fund invests predominantly in a broad range of international shares listed on stock exchanges in developed and emerging international markets. The Fund will maintain a reduced carbon exposure compared to the benchmark, whilst also increasing exposure to renewable energy and taking into account other environmental, social and governance (ESG) issues such as the exclusion of controversial weapons, uranium and tobacco companies. Derivatives may be used to obtain or reduce exposure to securities and markets, to implement investment strategies and to manage risk.


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 footprint;
- 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 (i.e. extraction and/or power generation); 
- 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 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 Global Shares Fund - Class AUDH

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