HSBC, Schroders launch sustainable multi-asset income fund

SCHRODER Investment Management (Singapore) has launched a multi-asset fund targeting investors who would like to "generate positive societal and environmental impact alongside financial returns".

HSBC Singapore is the sole distribution partner for the Schroder ISF Sustainable Multi-Asset Income fund.

"The strategy is attractive in the current environment as investors need to contend with the dual challenges of persistently low yields and an increased urgency to prioritise rising sustainability risks heightened by the global pandemic and recent climate events," HSBC and Schroders said in a joint statement.

HSBC customers will be able to invest in the fund with a minimum sum of S$1,000. The fund's base currency is in euros, but Sing dollar, US dollar and Australian dollar hedged classes are also available to investors.

According to HSBC and Schroders, the fund aims to deliver a natural base level of income of 3 to 5 per cent per annum to be paid monthly, by investing across a range of asset classes and regions. These asset classes include investments that target better sustainable outcomes, such as carbon-neutral equities and green bonds, HSBC and Schroders said.

A key feature of the fund is that Schroders produces reports with "different sustainability lenses", from the fund's carbon profile to positive characteristics relative to the United Nations' Sustainable Development Goals. This is to provide greater clarity and insights to clients on the impact of their investments, the organisations said.

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This is as compared to other sustainability funds in the market that rely on third-party scoring or screening for environmental, social and governance (ESG) analysis, where ratings across different agencies may be inconsistent and are typically backward-looking, HSBC and Schroders said.

Said Lily Choh, deputy chief executive officer of Singapore and head of distribution for South-east Asia at Schroders: "The Covid-19 pandemic has sharpened focus on ESG risk with recognition amongst investors and institutions over how these factors are becoming increasingly material to investment outcomes."

She cited research from Schroders' latest Global Investor Study which found that 43 per cent of investors in Singapore now frequently invest in sustainable investment funds, up from 31 per cent two years ago.

Added Ms Choh: "Sceptics have long argued that growing interest in sustainability would not be supported as markets become more challenging. On the contrary, the current crisis has put sustainable investment in the forefront of investors' minds with growing evidence that sustainable business models are more resilient and better able to withstand market shocks."

Ian Yim, head of wealth and international at HSBC Bank (Singapore), noted that the lender's commitment to furthering sustainability includes pledging US$100 billion globally in sustainable financing and investments by 2025.