Robeco has launched QI Emerging Markets Sustainable Enhanced Index equities.
The strategy aims for a 20% higher score on environmental, social and governance (ESG) criteria than the benchmark (MSCI Emerging Markets Index) and aims to reduce the environmental footprint for greenhouse gas emissions, water use, waste generation and energy consumption by 20% compared to the benchmark, while maintaining the ability to provide alpha in emerging markets.
It uses an extensive values-based exclusion list and includes voting and engagement, which will be carried out by Robeco's Active Ownership team.
The fund uses a quantitative stock selection strategy which ranks stocks according to sustainability criteria as well as their expected future relative performance using the factors: valuation, quality, momentum, resulting in a well-diversified portfolio with a low tracking error relative to the index.
The portfolio overweights stocks with a strong sustainable profile, attractive valuation, a profitable operating business, strong price momentum, and positive recent revisions from analysts.
It is managed by Robeco's Core Quant Equities team, responsible for managing a wide range of Enhanced Indexing strategies including global, European, US and emerging market strategies.
The newly launched strategy builds on the knowledge and expertise of the existing Emerging Markets Enhanced Indexing strategy, and the sustainability approach of the existing Developed Markets Sustainable Enhanced Index strategy and Active Emerging Markets Sustainable strategy.
This article first appeared on our sister title Investment Europe