The UK investment house is expanding its £2.3 billion ethical fund range.

Kames Capital is launching a Dublin-based sustainable equity fund later this month for investors in a range of European markets, subject to regulatory approval.

The Kames Global Sustainable Equity Fund will invest in a portfolio of 35-45 stocks, using both quantitative and qualitative research to capture sustainability "leaders" as well as "improvers", the firm said. It believes there is a strong correlation between companies that improve their sustainability performance and positive share-price performance.

The high-conviction fund will be managed by Craig Bonthron and Neil Goddin, who will be supported by Ryan Smith, Kames' head of governance and ethical research. They will apply Kames’ proprietary sustainability screen, which focuses on environmental, social and governance considerations, together with a number of negative screens such as tobacco.

The fund will be available in the UK, Austria, Belgium, Germany, Guernsey, Ireland, Italy, Jersey, Luxembourg, Malta, Netherlands, Spain, Sweden and Switzerland. Net of annual fees of 0.75 per cent, it will aim to outperform the MSCI All Country World Index Total Return by 3 per cent over a rolling three-year period.

Kames manages £2.3 billion ($3.3 billion) in specialist ethical funds. From Edinburgh and London, the company managed £56.8 billion on behalf of clients including financial institutions, wealth managers, family offices and financial advisors as at the end of 2015.