EXCLUSIVE: Martin Currie's ESG Pride, Positive Stance On UK, Chinese Stocks

Amanda Cheesley Deputy Editor 5 June 2024

EXCLUSIVE: Martin Currie's ESG Pride, Positive Stance On UK, Chinese Stocks

After Martin Currie, a specialist investment manager of Franklin Templeton, launched its first social impact fund in 2023, the firm talks about the importance of ESG-focused funds and the case for UK and Chinese equity markets.  

Fund management business Martin Currie is happy to broadcast its ESG investing track record and work on socially-focused asset management, while it also told this news service in an exclusive interview about its optimism on UK and Chinese equities. 

This is a business unafraid to stick its neck out.

“We are very proud of our stance on ESG, and we embed the criteria into our stock selection process,” Michael Browne, chief investment officer at Martin Currie said. 

Browne drew attention to the sub-fund of the Franklin Templeton Global Funds range domiciled in Ireland – the FTGF Martin Currie Improving Society Fund – which is categorised as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR). The fund provides access to socially-focused investments which are aligned with UN Social Development Goals (SDGs). It is registered for distribution in France, Italy, Luxembourg, the Netherlands, Sweden and the UK.

The social impact global equity fund aims to deliver long-term capital growth while advancing fairness of social opportunity and narrowing the equality gap. It invests in a concentrated, high conviction and long-term portfolio of 20 to 35 companies globally that contribute to three impact pillars: improving wellbeing, improving inclusion and supporting a transition towards a sustainable economy, Browne said. He thinks the fund demonstrates what Martin Currie is doing on ESG and the importance they attribute to it.

UK equities
Browne is also more optimistic about UK equities in 2024, now that inflation is coming down. He is particularly positive about the UK construction sector and housing market.

After UK Prime Minister Rishi Sunak called a UK general election for 4 July and with opinion polls skewed towards a victory for Keir Starmer’s Labour, Browne thinks that kickstarting the housing market will be a priority for the new government. He has added some positions here recently, including the Vistry Group, a UK provider of affordable mixed tenure homes.

Ben Conway at Hawksmoor Investment Management and Alec Cutler at Orbis Investments are also optimistic about the UK equity market in 2024, notably UK mid-small caps, saying it is an undervalued market. See more commentary here. 

Chinese equities
Browne is also more optimistic about the Chinese equity market in 2024, saying it is showing signs of improvement, with action in the property market. “We maintained our position on China and I think that’s probably a good thing now,” he said.

The International Monetary Fund has just upgraded China’s growth forecasts to 5 per cent from 4.6 per cent in 2024, after a strong first quarter, and to 4.5 per cent in 2025. It was also down to additional policy measures.

China announced a number of initiatives to support the housing market in May, but China’s property woes remain a drag on growth, with some analysts saying that the measures fall short of what is required for a sustainable recovery.   

Nevertheless, Sheldon Chan, portfolio manager for Asia Credit Bond Strategy, and Chris Kushlis, chief emerging markets macro strategist at asset manager T Rowe Price, think that the new effort, which shifts the focus to reducing inventories, rather than solely focusing on stabilising demand, represents a significant change in policy focus – a move in the right direction. See more commentary here.

Browne also sees some investment opportunities in the Indian market, notably in the financial sector, with stocks including India’s HDFC Bank. Other wealth managers, such as Ocean Dial, also favour Indian equities in 2024. See more commentary here.

Martin Currie, which runs around £17 billion ($20 billion) in assets, is a specialist investment manager of Franklin Templeton, a global asset manager with AuM of $1.3 trillion.  

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