From Bloomberg via Yahoo Finance, July 22:
An ESG fund run by Alken Asset Management Ltd. has outperformed 98% of its peers over the past year, helped by a bet on European defense stocks while they were still cheap.
The Alken Fund Sustainable Europe (ALCSEU1 LX) is up about 9% in the period, compared with an average drop of roughly 9% among similar funds, according to data compiled by Bloomberg. Aside from defense, which represents about 8% of the portfolio, the fund’s gains were driven by its exposure to energy and raw materials.
London-based Alken, which oversees about 1.5 billion euros ($1.5 billion) in total, is the latest example of an investment manager offering outsized ESG returns by betting on industries that aren’t generally associated with environmental, social or governance goals. Alken’s Sustainable Europe fund, which is registered in Luxembourg, qualifies as a so-called Article 8 product under European ESG rules, meaning it “promotes” sustainability.
After years of under-investment, Europe’s defense sector was undervalued and poised to “benefit massively” from the current political climate, Nicolas Walewski, founder of Alken Asset Management and co-manager of the firm’s Sustainable Europe fund, said in an interview.
Alken started buying defense assets in the middle of last year, Walewski said. He and his team were “surprised” that others weren’t doing the same, but more investors then “actually jumped in fairly quickly in March and April,” he said. The portfolio is overweight industrials, with its exposure to defense stocks including companies like Thales SA, and to the energy sector....
....MUCH MORE
Previously:
Why Your ESG Fund Is, And Will Be, Dominated By Technology Stocks (and what it means for your returns)
What it means for your returns is that you end up with a Nasdaq 100 tracker.
And not just the 100 but in truth the top ten weights which amount to almost 50% of the index:...
....Why is this the case? Because there are, what's the number being bandied about, $30 trillion? Thirty trillion in assets that are being peddled as Environmental, Social and Governance sensitive names.
So there is a huge battle going on among the behemoth marketeers to be the one to define what is meant by the terminology so as to advantage their own businesses.
And these product packagers, BlackRock with $7 trillion, State Street with $3 trillion, Vanguard and Fidelity with $9 trillion between them, have the clout to call whatever they want whatever they want, and make it stick.....
AQR Capital's Cliff Asness on Environmental/Social/Governance (ESG) Investing
Professor Damodaran: "Sounding good or Doing good? A Skeptical Look at ESG"
ESG Heresy Triggers Shock & Horror... And About Time!
"SEC Cracks Down On "Dubious" ESG Labels Tied To $35 Trillion In Assets"(actually it's probably just regulatory capture by BlackRock: they want to be the sole determiner/arbiter of who gets the label)
And many, many more. If interested use the 'search blog' box upper left.
