BNY Mellon Investment Management has launched a sustainable global equity income fund under the management of boutique Newton Investment Management's Nick Clay, and head of responsible and charity investment Rob Stewart.
The BNY Mellon Sustainable Global Equity Income fund, which is supported by the wider equity income team, including portfolio manager Andrew Mackirdy, and analysts Robert Canepa-Anson and Colin Rutter, will represent a portfolio of less than 70 stocks screened by Newton's sustainability criteria.
With an annual charge of 0.75% for the W share class, the fund will target income with some capital growth by investing in stocks demonstrating sustainable business practices with no unresolvable ESG issues.
However, the portfolio may also include companies with lower ESG scores that can be improved through engagement.
It is the fifth sustainable fund launched under Newton for UK investors, following the launch of the BNY Mellon Sustainable Global Dynamic Bond, Sustainable Global Equity Sustainable, Real Return Sustainable Sterling Bond funds.
Clay's existing £8.6bn AUM global income strategy, is a consistent top-quartile performer in the IA Global Equity Income sector, having returned 15.8%, 35.6% and 90.7% over one, three and five years to 17 July respectively, according to FE.
Over the same time periods, the sector has returned 10.6%, 32.5% and 59%.
Commenting on the launch, Clay said: "The return of volatility in markets is creating opportunities for actively managed income strategies, and it is our belief that increased volatility is here to stay through the latter part of the investment cycle.
"In periods such as this, it can be prudent for investors to consider a more defensive, active strategy in which ESG considerations play a key role."
Head of European intermediary distribution at BNY Mellon IM Hilary Lopez added: "The Global Equity Income strategy has a long track record of delivering returns to our clients with its disciplined approach to fundamentals and valuation.
"ESG integration is already a core part of our process and we are seeing increased demand from clients for funds that are more specifically sustainable in focus.
"The BNY Mellon Sustainable Global Equity Income Fund has been launched to meet these client demands."