Vanguard and UBS have launched ESG funds, taking advantage of the increased popularity of sustainable investing in the wake of the coronavirus pandemic. Orchard Capital Management, by contrast, sees the deep unpopularity of value stocks as the perfect opportunity to launch a US value small cap fund…
The Vanguard ESG Emerging Markets All Cap Equity Index Fund offers investors broad ESG exposure to emerging markets, at a cost of 0.25%. The new funds follows an FTSE index of emerging market equities, excluding companies involved in non-sustainable energy, weapons and harmful products such as tobacco and alcohol. The fund is available to retail and institutional investors.
Sustainable corporate bonds
UBS Asset Management has launched an ETF in sustainable global corporate bonds. The new product is a good contender for the unofficial title of the ETF with the world’s longest name: UBS ETF Bloomberg Barclays MSCI Global Liquid Corporates Sustainable UCITS ETF. The ETF has an exposure to more than three hundred different corporate bond issuers.
The sustainable sauce consists of an integrated environmental and governance filter and a social filter. Companies that score insufficiently on various sustainability criteria will be excluded.
US value fund
Orchard Capital Management launched a US small-cap and value fund for European investors. ‘There are only a few dedicated American value investors left in the small-cap category. There is hardly anything else available in UCITS’, the provider says.
The launch is striking at a time when value and small-cap investors have been underperforming for a considerable amount of time. According to Orchard however, the category is ‘the best performing segment in American equities in the long term’. Over the past thirteen years, US Small Value has underperformed. Thanks to that, it is now the most attractively priced segment within US equities, according to Orchard.