The RSMR monthly fund update - the new recruits from our February review

Every month we study the universe of funds in the investment marketplace to assess whether they meet our exacting standards and should be given the RSMR seal of approval. 

Here are the new recruits from our February review: 

Impax Asian Environmental Markets

The Impax Asian Environmental Markets fund is an actively managed fund that is classified within the IA Specialist sector, although the fund invests in Asian and Japanese equities. The fund uses a custom benchmark comprising of 80% MSCI AC Asia Pacific ex Japan and 20% MSCI AC Japan. The hybrid allocation allows exposure to Japan where companies are forming part of the industrialisation and energy efficiency initiatives for broader Asia.

Impax applies a positive screen to invest in companies and assets that are well positioned to benefit from the transition to a more sustainable economy. This is achieved by Impax using a proprietary definition of environmental markets that establishes the investable universe. This definition enables six clear distinct themes being identified covering New Energy, Clean & Efficient Transport, Sustainable Food, Water, Circular Economy and Smart Environment. For a company to be included in the universe, at least 20% of underlying revenue must be generated by sales of environmental products or services in the themes.

Although the fund does not utilise a negative screen, due to the nature of the themes, contentious industries and sectors are avoided with a Responsible Investment Sub-Policy for the fund that describes the position with regards to certain activities (e.g., tobacco, weapons, coal extraction, oil & gas extraction, electricity generation, biodiversity, water).

Natural gas exposure is permitted in the fund as natural gas is seen as a transition fuel in Asia and Impax consider natural gas significantly better for pollution control, energy density and carbon intensity reduction. The fund invests in natural gas distribution utilities (as opposed to extraction or exploration) businesses.

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