US asset manager AllianceBernstein scooped a brace of ESG fund of the year awards after being praised for its "thoughtful" approach to integrating sustainability into its investment strategies.
The $800 billion asset manager secured the ESG multi-asset fund of the year award for its €100 million ($116 million) AB Sustainable All Market Portfolio fund launched in 2020 and the EMEA ESG fixed income fund of the year award for its €300 million AB Sustainable Euro High Yield Portfolio fund.
A Sustainable Investment Awards judge hailed the AllianceBernstein team for its "thoughtful alignment" with sustainable criteria demonstrated through its thematic approach.
AllianceBernstein said the Sustainable All Market fund only invests in assets which are aligned to long-term sustainable themes it believes offer compelling growth potential "underpinned by multi-decade structural mega-forces". Meanwhile, the Sustainable Euro High Yield fund is more than 96% invested in these mega-themes.
In particular, the funds are focused on three primary themes – climate, health, and empowerment – with several key sub-themes including energy transformation, medical innovation, and computing and connectivity.
The Sustainable All Market fund, meanwhile, was also praised for its proactive approach to managing the biases which are often introduced by sustainable investment strategies. For example, sustainable investments can often focus on high-growth and volatility stocks and investments in Europe.
To mitigate this, the high-conviction multi-asset fund includes 'stable equity' exposures alongside its 'growth equity' assets and 'sustainable opportunity' allocations, which target "non-traditional" investments such as carbon credits and public infrastructure lending.
Another judge said this provides a "good narrative" for a "great" multi-asset product.
The strength of the approach means that both funds are classified as 'Article 9' under the EU Sustainable Finance Disclosure Regulation (SFDR). Indeed, the Sustainable Euro High Yield is one of only three Euro High Yield funds to use this 'dark green' EU classification, which requires them to demonstrate the most ambition with regards to sustainable investment objectives.
In addition, the Euro High Yield fund invests at least 15% in sustainable-labelled bonds from high yield issuers. Unlike many other funds, AllianceBernstein also invests in sustainability-linked bonds (SLBs) despite the performance-based instrument being increasingly scrutinised. As an important sustainable bond instrument in the high yield market, however, the asset manager has invested in its capabilities to ensure it can determine whether it is convinced by the SLB at the time of issuance.
