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Decarbonising equity strategies
Russell Investments has developed four portfolio decarbonisation strategies without materially affecting investment performance, through research by its equity strategy experts.
Partnering with superannuation fund HESTA, Russell Investments has increased its expertise in factor-based investing to identify the total carbon exposure in a portfolio and has incorporated an assessment of potential stranded asset risk from carbon reserves.
Russell Investments director of equity strategy and research, Scott Bennett, said "the research validated our unique outcome-orientated approach developed to achieve a greater than 50 per cent reduction in the carbon footprint and deliver benchmark-like returns".
The customised strategy has an objective to remain at or below 50 per cent of benchmark carbon dioxide emissions and carbon reserves in a risk-constrained manner, and excludes all exposure to tobacco.
Russell Investments head of strategic partnerships for Australia, Nicki Ashton said the new quantitative equity solution met HESTA's specific requirements to deliver a low-carbon, global equity investment strategy.
"We can apply the same expertise to provide similar customised solutions for a wide range of investment products, including centralised portfolio management, after-tax, single-factor, multi-factor, ESG [environment, social, and governance], and of course low-carbon," she said.
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