Legal & General Investments is launching a passive environmental fund investing in global equities.
The Global Environmental Enterprise Fund, which will launch on 16 June, will track the Osmosis Climate Solutions Index. This index contains 100 companies that obtain more than 50 per cent of their profits from climate change solutions. The fund will be managed by L&G’s Robert Dowling.
Simon Ellis, managing director of L&G Investments, says the fund will target growth from three global climate change themes: energy efficiency, low carbon energy production and waste and water control. The osmosis index is structured and weighted according to these themes to allow the fund to incorporate ‘new and innovative’ companies.
HSBC estimates that annual revenues from the energy efficiency space stand at $740 billion (£452 billion). However, L&G claims that UK funds invest less than $20 billion (£12 billion) in this space. ‘Energy efficiency is a really important long-term theme,’ Ellis adds. ‘This represents a massive investment opportunity in a hopelessly underdeveloped marketplace.’
The fund will sit in the IMA global sector. The minimum investment is £500 and it has an annual management charge of 1.25 per cent.