Equity – ESG Focus

Philosophy

We believe that the most virtuous companies in terms of ESG criteria (Environment, Social, Governance) are those best placed to meet the challenges of tomorrow. We believe that investing in these stocks offers the potential for long-term performance.

The Equity ESG Focus strategy focuses on selecting the best-rated stocks in terms of ESG criteria, using our proprietary methodology specific to quantitative management. The aim is to optimise financial performance relative to an equity reference index by incorporating extra-financial dimensions.

Key Points

  • target

    Limited tracking error

    Prudent management seeking to optimise the risk relative to the reference index.

  • responsible

    ESG approach

    A socially responsible investment solution incorporating ESG objectives and valuing the best-rated companies in terms of environmental, social and governance criteria.

  • life-cycle

    Carbon footprint reduction objective

    The strategy seeks to minimise the portfolios’ overall carbon footprint.

Investment Strategy

The Equity ESG Focus strategy is a pure quantitative equity strategy that offers exposure to international equity markets through active management. The strategy uses a proprietary quantitative model to optimise stock selection and weightings according to ESG criteria. Portfolio construction also includes compliance with a predefined relative risk budget to ensure that the portfolio profile does not deviate too far from that of the reference index. For dedicated funds, the strategy can be applied to several geographical areas and adapted to different relative risk budgets.

Objective

The objective of the Equity ESG Focus strategy is to outperform an equity index through a quantitative selection of securities incorporating environmental, social and governance (ESG) criteria.

In terms of extra-financial objectives, the strategy seeks first and foremost to achieve an overall ESG rating for the portfolio that is higher than the rating for the investment universe, from which the lowest-rated 20% securities are excluded. The investment team also takes into account the carbon intensity of each stock in order to minimise the overall carbon footprint of the portfolio and selects companies whose governance is considered solid, with a focus on the independence of the Board of Directors. The investment process also considers social and human rights criteria, as well as Ostrum Asset Management's exclusion policies.

 

Main risks: risk of capital loss, equity market risk, discretionary management risk, sustainability risk. ESG integration refers to the inclusion of ESG issues in investment analysis and decisions. The approach to ESG integration varies from fund to fund. ESG integration does not necessarily imply that investment vehicles also seek to generate a positive ESG impact.

Our Experts

  • Nicolas Just

    Nicolas Just

    CIO quantitative management

  • Pierre Savarzeix

    Pierre Savarzeix

    Portfolio Manager

  • Ruixing Cai

    Ruixing Cai

    Portfolio Manager

  • Stéphanie Noël

    Stéphanie Noël

    Portfolio Manager

  • Sébastien Guérin

    Sébastien Guérin

    Portfolio Manager