AllianceBernstein has launched the AB Global ESG Improvers Portfolio, a transition and engagement strategy.
The portfolio uses AB’s proprietary equity research and invests in stocks that have strong ESG credentials and are trading at a discount. AB says the portfolio invests in two areas which traditional ESG approaches have tended to bypass: Neglected enablers, overlooked businesses supplying vital components that underpin wider ESG gains, and unrecognized improvers, businesses where there ESG profile is underappreciated. Alignment with one of these ESG opportunities is required for inclusion in the portfolio. The portfolio will be made up of 30-40 stocks with the highest conviction and improving-ESG potential to construct the final portfolio. It has been classed as an Article 8** fund.
Jeremy Taylor, portfolio manager AB Global ESG Improvers Portfolio, commented:
“We believe we can deliver notable investment returns by investing in underappreciated companies that are also driving material ESG improvement. Currently we find that sectors such as materials, utilities and industrials contain a significant number of stocks where market perceptions are yet to catch up with significant ESG improvements. Progress in these industries will be key to the world meeting substantial ESG challenges such as decarbonization. We don’t feel that this has yet been properly understood or valued by the market, but we aim to bring it to the forefront. Additionally, the approach means the fund generates exhibits value characteristics, a key differentiator to counterbalance the growth bias inherent in many responsible funds.”