ClearBridge Investments has introduced the Global Value Improvers Fund, designed to offer exposure to undervalued companies and those making progress on ESG (Environmental, Social, and Governance) initiatives. This launch follows the introduction of ClearBridge’s first global equity option earlier this year.
Grace Su, a portfolio manager at ClearBridge, stated that the fund invests in 30 to 40 securities across developed and emerging markets, guided by three core pillars: Enablers, Reformers, and Promoters.
“We are focused on companies that we believe are committed to change. We think there’s a lot of opportunity in companies the market doesn’t classify as ESG friendly or which have not had their success in incremental ESG achievement recognised,” Su said.
Enablers are companies with notable ESG success within their industries or customer bases, while Reformers are “former bad actors” transitioning to greener solutions. Promoters are entities making a direct impact by advancing the United Nations Sustainable Development Goals through their products and services.
ClearBridge noted that the fund provides Australian investors with an option to invest in ESG-focused companies. Su emphasised that the fund can help investors diversify their equity portfolios, particularly in response to “heightened volatility” in the market.
“In recent months, political risk and policy uncertainty have become increasing overhangs on equity markets and we expect this to continue,” Su said, adding, “Overall, periods of heightened volatility remind us of the importance of portfolio diversification and the benefit of having longer-term investment themes, such as energy transition and governance reform, which are less tied to the economic cycle and thus lend stability during extreme market movements.”
This announcement comes amid challenging times for ESG funds, as highlighted by a recent Preqin study.
According to the Alternatives in APAC 2024 report, ESG funds have faced difficulties raising capital, with those in the Asia-Pacific region experiencing a 77% drop in aggregate capital raised last year. However, the closure rate of ESG funds in 2023 has been declining.