A pioneering equity fund that advocates sustainability investing by handpicking local publicly-listed companies that embrace the United Nations Sustainable Development Goals (SDGs) has been rolled out by fund management firm ATR Asset Management (Atram).
Atram Philippine Sustainable Development and Growth Fund is designed to invest in companies that score high in terms of the integration of UN SDGs into their operations and strategy and have reported attractive returns relative to valuations. It is a unit investment trust fund with an equity portfolio initially consisting of 20 large, mid- and small-cap companies listed on the Philippine Stock Exchange. The investment thesis is that integrating sustainability issues in companies’ businesses will drive long-term returns and reduce costs.
This is the first fund in the Philippines to make its selection on the back of the UN SDGs. “We hope that makes a difference. We hope it creates a positive impact,” Phillip Hagedorn, the chief investment officer of Atram, said in a webinar on Thursday.
Sustainability investing has been a rapidly growing investment theme in recent years. Globally, investors have started to flock toward funds focused on environmental, social and governance and have been amply rewarded as these have outperformed other funds, thus showing growing investor focus on companies that have aligned with the SDGs. “Sustainability has become more relevant in a post pandemic environment that has waged a hefty cost on society and the economy. The fund hopes to mitigate some of these effects by incentivizing companies to continuously invest in wellness, progress and fairness as expressed in the UN SDGs. There is a need to draw inspiration from those who put welfare and responsibility at the forefront,” Hagedorn said.
The fund is currently available to investors for a minimum participation of P1,000 through Atram’s platform Seedbox. Once this is made available to digital payment platforms like GCash, it will be priced like Atram’s other funds in that platform at P50, said Atram head of research Jose Mari Lacson.At present, the top 11 component companies of the fund are Ayala Land, Axelum Resources, BDO Unibank, Bank of the Philippine Islands, Century Pacific Food, Eagle Cement Corp., First Gen, Jollibee Foods Corp., Manila Water, Union Bank and Wilcon Depot.
Atram intends to update the scores every year, but rebalancing will happen quarterly. If there’s a company that falls out of favor due to governance concerns, it will be taken out of the fund immediately, Hagedorn said.