The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

LGT Capital Partners
Switzerland headquartered LGT Capital Partners, a global specialist in alternative investing, has launched a new hedge fund vehicle, LGT Global Hedge Funds. The fund, which allows institutional and wealth management clients to invest in the same strategies used by the family’s endowment, is available to qualified investors in key European markets.

The portfolio offers investors direct access to the individual building blocks of the hedge fund strategies allocated to the LGT Endowment, the firm’s principal evergreen portfolio. The programme invests equally in discretionary and systematic hedge fund strategies and offers monthly liquidity.

The new commingled fund vehicle provides institutional investors and wealth management clients with streamlined access to hedge fund investments and offers regular liquidity, the firm said in a statement.

The hedge fund vehicle aims to deliver absolute returns with downside risk mitigation in any market environment. It is uncorrelated to traditional asset classes such as equities and bonds, and builds on LGT Capital Partners’ tradition of selecting external hedge fund managers, as well as using the firm’s direct, in-house quantitative investment capabilities.

The portfolio aims to invest in more than 30 hedge fund managers globally and to strike a balance between discretionary and systematic strategies. On the discretionary side, specialised teams will seek to generate profit through deep fundamental analysis in the form of single stock selection – investing in events such as mergers and acquisitions and various segments of the global credit markets. On the systematic side, it will prioritise quantitative hedge funds with strategies such as trend-following commodity trading advisors (CTAs), quantitative macro, short-term trading, equity-market neutral quants and AI/machine learning.

“We are pleased to offer our clients a new and efficient way to invest in the best of both worlds within the hedge fund universe: those that are traded by humans and those that are run by computer models. The result is a diversified portfolio consisting of 15 distinct sub-strategies aimed at generating alpha,” Roger Hilty, partner at LGT Capital Partners, said.

Headquartered in Pfaeffikon, Switzerland, LGT Capital Partners has over $100 billion in assets under management. It has offices in San Francisco, New York, Dublin, London, Paris, The Hague, Luxembourg, Frankfurt am Main, Vaduz, Dubai, Beijing, Hong Kong, Tokyo and Sydney.

DWS
German asset manager DWS is expanding its range of Xtrackers Exchange Traded Funds (ETFs) with a product that reflects the performance of infrastructure stocks meeting environmental, social and governance (ESG) criteria. This is the first ETF to track the ESG variant of a broad, traditional infrastructure index, the firm said in a statement.

With the Xtrackers Global Infrastructure ESG UCITS ETF, DWS offers access to companies that provide energy, transport, and communications infrastructure, among others. Companies in these segments are expected to show comparatively lower fluctuations in their fundamentals across the economic cycle.

The ETF, which was listed on the London Stock Exchange and Deutsche Börse last week, with a flat fee of 0.35 per cent per year, aims to closely track the Dow Jones Brookfield Global Green Infrastructure Index. Calculated since 2016, the index reflects the performance of 73 listed infrastructure companies, most of which are based in industrialised countries and meet ESG criteria.

Electricity utilities make up the largest portion of the index, at around 32 per cent, followed by telecommunications infrastructure, primarily cell tower REITs (19 per cent), multi-utilities (11 per cent), and construction and engineering (10 per cent).  

In terms of countries, the US dominates with 15 listed companies and an index weighting of over 46 per cent, followed by Spain, France and the UK, each with five companies and a cumulative index weighting of 29.5 per cent. The index also includes 13 Chinese companies, with a combined weighting of 2.6 per cent. The largest individual stocks are the US transmission tower operator American Tower, with an index weighting of approximately 9.5 per cent, and the French transport infrastructure and construction group Vinci, at 7.9 per cent.

“The need for infrastructure beyond fossil fuels is growing rapidly as governments and companies worldwide seek to develop more sustainable infrastructure focused on electrification and computing,” Michael Mohr, head of products at Xtrackers, DWS said. “The index offers broad, global infrastructure exposure, but its focus is particularly on infrastructure projects that rely on greener technologies.”

Fidelity International
As part of its commitment to sustainable investing, Fidelity International has launched its Fidelity Funds 2 – Blue Transition Bond Fund, the first blue transition fixed income fund to be launched globally according to its market analysis. It is registered for sale in multiple countries across Europe, including the UK, the firm told WealthBriefing.

The blue transition aims to balance ocean, coastal and inland river system usage and resources with the conservation of healthy and productive marine and freshwater ecosystems.

Oceans and freshwater play a crucial role in regulating our climate, providing food and livelihoods, and supporting diverse ecosystems. Yet they are under threat and their protection is underfunded; the United Nations Sustainable Development Goal (SDG) “Life Below Water” remains the least funded SDG, not far behind “clean water” and "sanitation,” which is the sixth least funded.

The fund, which will be managed by Kris Atkinson and Shamil Gohil, aims to achieve capital growth over the long term, focusing on supporting the transition towards improved ocean and freshwater health by investing in global bonds or bonds of issuers that:

(i) Contribute to ocean and freshwater objectives aligned with one or more United Nations Sustainable Development Goals (SDG);
(ii) Use bond proceeds to finance projects benefiting ocean and freshwater related sustainability (including blue bonds);
(iii) Aim to improve management of water-related risks and opportunities; and
(iv) Reduce the negative impact of climate change on the ocean or freshwater.

A minimum of 80 per cent of the fund’s investments are used to meet the environmental or social characteristics promoted by the fund.

“We are particularly focused on blue bonds, a sub-component of the green bond market, which finance ocean and freshwater related projects,” Atkinson said.