Martin Currie, a specialist investment manager of Franklin Templeton,1 is delighted to announce the launch of its first social impact fund. A sub-fund of the Franklin Templeton Global Funds plc range domiciled in Ireland, the FTGF - Martin Currie Improving Society Fund2 is categorised as Article 93 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
It will be registered for distribution initially in France, Italy, Luxembourg, Netherlands, Sweden and the UK.
This new social impact global equity fund aims to deliver long-term capital growth while advancing fairness of social opportunity and narrowing the equality gap.
It will invest in a concentrated, high conviction and long-term portfolio of 20-35 companies globally that contribute to three impact pillars: improving well-being, improving inclusion and supporting a just transition toward a sustainable economy.
With more than 70 years of combined investment experience in global and international investing, the fund’s investment team consists of Martin Currie’s Edinburgh-based Lauran Halpin, Portfolio Manager and Head of Impact Equities, and John Gilmore, Portfolio Manager, Impact Equities and Stewardship, Sustainability & Impact Specialist. David Sheasby, Head of the Stewardship, Sustainability and Impact team, will act as an advisor to the investment team; Sheasby has expertise in active ownership and impact frameworks.
Focus on real-world impact and long-term growth
Commenting on societal development objectives generally, Halpin said: “these objectives have historically been grossly underfunded and abandoned in some communities to focus on other important issues like climate change and Covid-19.
The Organisation for Economic Co-operation and Development (OECD) estimates there is a $2.5 trillion4 annual funding gap in meeting the UN Sustainable Development Goals (SDGs). There is a significant opportunity to create impact at scale by investing in companies that are contributing to pressing societal needs like providing access to clean drinking water, healthcare and education as well as financing job re-skilling for working in a green economy.”
Halpin has extensive experience in managing sustainable funds and ESG research, particularly in areas relating to climate change and healthcare. Gilmore has been with Martin Currie since 2019 and dedicated to supporting Martin Currie’s stewardship and sustainability strategy since 2020.
Halpin continued: “This new fund invests in companies innovating to address societal needs with long-term growth potential, which in turn encourages cash flow and returns and reinvestment into addressing other societal issues. Companies with products that make a difference in people’s lives can benefit from long-term profit pools generated by ongoing societal needs and ultimately gain a competitive advantage.”
The strategy also aims to deliver strong risk-adjusted returns; the social impact investment universe has historically had lower volatility than and comparable returns to the MSCI All Country World Index.
Intentional and measurable social impact to address fairness and inequity
The portfolio management team have developed a proprietary impact framework and will measure the social impact companies create through company-specific key performance indicators (KPIs) and engagement objectives. Additionally, the team will measure the contributions of the underlying companies against seven socially - focused SDGs. These are: No Poverty (SDG 1), Zero Hunger (SDG 2), Good Health and Well-Being (SDG 3), Quality Education (SDG 4), Gender Equality (SDG 5), Clean Water and Sanitation (SDG 6), and Reduced Inequalities (SDG 10).
Mel Bucher, Head of Global Distribution for Martin Currie, said: “This exciting new launch brings to market our first Article 9 fund and provides clients with an innovative social impact fund. Importantly, the investment team have designed and built this strategy to access portfolio companies that aim to achieve intentional and real impact. We envisage the portfolio will include underlying holdings that are not owned in conventional global equity funds and will therefore complement existing allocations.”
Dedication to stewardship and sustainability
Martin Currie has been integrating stewardship and sustainability into its investment processes since 2008 as part of its robust governance and sustainability framework. Its dedicated Stewardship, Sustainability & Impact team was created as a strategic but natural evolution of the firm’s leadership in stewardship and sustainability investment capabilities in 2022.
Anne Simpson, Global Head of Sustainability, Franklin Templeton said: “Martin Currie’s Improving Society Fund is an exciting new offering that will leverage the team’s deep expertise in both sustainability and stewardship. With a focus on social impact, we believe there is opportunity to deliver superior risk adjusted returns to our clients by investing in companies that contribute to the UN Sustainable Development Goals.”
This document is based on an update from Martin Currie, a subsidiary of Franklin Templeton. The views expressed are opinions of the Portfolio Management team as of the date of this material and are subject to change based on market and other conditions without notice and may differ from other investment professionals or from those of the firm as a whole.
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security, or fund, or to adopt any investment strategy. It does not constitute legal or tax advice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. Individual securities are examples only and are not recommendations to buy or sell an investment. Opinions expressed are subject to change without notice and do not consider the needs of investors. For the avoidance of doubt, if you make a decision to invest, you will be buying units/shares in the fund and will not be investing directly in the underlying assets of the fund.
This is a sub-fund of Franklin Templeton Global Funds plc ('FTGF'). FTGF is an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities ('UCITS'). FTGF is authorised in Ireland by the Central Bank of Ireland. Information has been prepared from sources believed reliable. It is not guaranteed in any way by any Franklin Resources, Inc. company or affiliate (together 'Franklin Templeton'). Before investing you should read the application form Prospectus and KIID. The fund documents may be obtained free of charge in English, German and Italian from FTGF's registered office at Riverside Two, Sir John Rogerson's Quay, Grand Canal Dock, Dublin 2, Ireland, from FTGF's administrator, BNY Mellon Fund Services (Ireland) Limited, or please visit www.franklintempleton.co.uk to be directed to your local Franklin Templeton website.
In addition, a summary of investor rights is available from franklintempleton.co.uk. The summary is available in English.
The sub-funds of FTGF are notified for marketing in multiple EU Member States under the UCITS Directive. FTGF can terminate such notifications for any share class and/or sub-fund at any time by using the process contained in Article 93a of the UCITS Directive.
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Notes to Editors:
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The Martin Currie Improving Society Fund is a sub-fund of the Irish domiciled Franklin Templeton Global Funds plc range.
This fund has been classified as Article 9 under the Regulation on sustainability related disclosures in the financial services sector (EU) 2019/2088. These are Funds which have an ESG integration approach, have binding environmental and/or social characteristics and a clear sustainable investment objective. Further information in relation to the sustainability-related aspects of the Fund can be found at franklinresources.com/countries. Please review all of the fund's objectives and characteristics before investing.
Source: Global Outlook on Financing for Sustainable Development 2021, OECD.
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