ESG Opportunities:
an essential factor
The value of a world more attentive to ESG - Environmental, Social, Governance - factors.
In the Sustainability section of our website we discuss how the importance of sustainability has grown in our company and in the world.
In particular, the financial sector must strive to achieve the common goals of safeguarding the planet and promoting equality policies in society through governance and investment choices, and by making its voice heard in shareholder meetings.
Nowadays, governments make sustainability central in their growth plans, and more and more companies take ESG factors into account in their strategies and operating models, with the aim of generating sustainable profits over time and, therefore, increasing their economic and financial value.
Some solutions to diversify your ESG portfolio are suggested below.
Investing in green bonds
Green Bonds provide a huge opportunity, as the green bond market has grown considerably in recent years, in the financial and utility sectors in particular. In 2023, new Green Bond issues amounted to close to 600 billion dollars in worth. Analyst estimates for the green market in 2024 vary between a confirmation of 2023 issues and a moderate growth scenario*. They support the growth of investments that include green issues by selecting global bonds based on the criteria laid out in the “Green Bond Principles” (GBPs), offering diversification by issuer and by geographical region. The GBP are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for this sub-fund category issuance.
Eurizon Fund - Absolute Green Bonds
The sub-fund that supports green investments
(Risk Class: 3, the risk indicator assumes you keep the product for 3 years)
Investing in the ESG leaders – LTE sub-funds
ESG leadership refers to the capacity to drive an organisation towards environmental, social, and governance objectives that are consistent with its strategic direction and values. Accordingly, ESG leaders must have extensive awareness of the expertise and capabilities required to foster technological advancement in their organisations, and of the hurdles and opportunities tied to the transition to sustainability. The Equity ESG Leaders sub-funds of the Eurizon Funds - LTE range are an efficient and effective instrument to track MSCI ESG Leaders index, enhancing the ESG profile of the portfolio while minimizing active risk and controlling liquidity and volatility, with transparent and competitive total costs.
The LTE sub-funds investing in shares and partly in bonds promote the ESG criteria as per art. 8 of the EU Regulation 2019/2088 SFDR. None of the LTE sub-funds has a sustainable investment objective as per art. 9 EU Re. 2019/2088 SFDR.
This results in robust and diversified portfolios that are similar to traditional indices in terms of allocation by geographic region and business sector, embracing sustainability goals and ethical standards. Their benchmarks ensure that investment is addressed to sustainability leaders, promoting long-term growth and resilience.
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Efficient and Transparent Structure:Eurizon Leaders LTE sub-funds present a competitive fee structure with costs in line with ETFs tracking similar benchmarks, while offering a significantly lower tracking error. Unlike their competitors, Eurizon LTE products are not affected by bid-ask spread, counterparty risk, and discount/premium dynamics, and offer an efficient and transparent range for strategic asset allocation.
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Positive Outlook for ESG Funds:ESG sub-funds are positioned to benefit from progressively stronger focus on sustainable investing, driven by increasing regulatory support and investor awareness. These funds are designed to capitalise on long-term trends in environmental protection, social responsibility, and corporate governance, while being shielded from the macroeconomic and market environment in their performance versus benchmark indices.
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Enhanced Risk Management:The investment process uses sophisticated quantitative models to optimise factor exposure and manage risk. This approach ensures portfolio diversification, minimises transaction costs, and maintains alignment with tracking error volatility targets.
Eurizon Fund - Limited Tracking Error - LTE Equity Funds
Explore the Equity ESG Leaders sub-funds within the Eurizon Funds - LTE range: a smart and efficient way to track the MSCI ESG Leaders Index.
* Source: Bloomberg NEF, Eurizon internal processing, data as at December 2023.
This is a marketing communication. Before taking any investment decision, you must read the Prospectus, the Key Information Document (the “KID”), as well as the Management Regulations and the last available annual or semi-annual financial report. These documents are available in English (and the KIDs in an official language of your country of residence) and may be obtained at any time, free of charge on the Management Company’s website www.eurizoncapital.com.
The content of this document, including any opinions, does not constitute any legal, tax or investment advice. Past performance does not predict future returns. There is no guarantee that the positive forecasts mentioned in this document will be reached in the future. Please liaise with your tax and financial advisor to find out whether a product is suitable to your personal situation and understand the related risks and tax impacts. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Should the Sub-Fund be registered/authorised in your country, the entity in charge of processing subscription, repurchase and redemption orders and other payments to unit-holders relating to the units of the UCITS (“Order & Paying facilities”), as well the entity in charge of handling information and Fund documents (“Information facilities”).
A summary of your investor rights including common actions in case of litigation at EU and national level is available in an official language (or authorised language) in the country of registration at www.eurizoncapital.com/en/investors-rights.
Before making a decision to invest, please also consider all the ESG characteristics or objectives and read the Prospectus, the SFDR Pre-contractual disclosure, as well as the Summary of the website Product disclosure, available in English and in an official language of your country of residence, in the section “Sustainability Disclosure” of the website at: www.eurizoncapital.com.
The Management company reserves the right to terminate the marketing arrangements of the Sub-Fund in your country.