Amundi and EBI to launch SRI model portfolios

Amundi and wealth manager EBI Portfolios have partnered to launch an SRI portfolio range.

The five global portfolios will target ‘best-in-class’ passive ESG-rated equities and bonds. Each model’s equity allocation will vary from 100% to 20% and will invest across a range of regional equity funds and/or two fixed income funds.

The equity element will invest in the Amundi SRI PAB equity funds, which track MSCI SRI Filtered PAB regional indices. These focus on the top 25% ESG-rated companies relative to their sector peers and have a wide range of systematic environmental- and social-based exclusions – for example, they exclude companies generating revenue from thermal coal mining or oil and gas extraction.

These indices also align with the EU Paris-Aligned Benchmark (PAB) regulation minimum requirements, including: a reduction in carbon intensity by 50%, compared to the underlying investment universe; and a reduction in carbon intensity by 7% on an annualised basis.

Meanwhile, the SRI fixed income element invests in two bond funds managed by Northern Trust Asset Management, which track Solactive Global Bond ESG Climate indices. These are focused on a global investment grade bond universe that is screened for ESG scores and carbon emissions, including targeting a 50% reduction in corporate bond carbon intensity compared to the parent index. EBI added risk in the SRI bond element is reduced by blending the two fixed income funds to target a shorter duration than the wider market.

Jonathan Griffiths (pictured), investment product manager at EBI, commented: “We know investors seek to invest in line with their values, while also seeking competitively priced investment solutions. With the launch of the SRI portfolios, we are in the sweet spot where these two elements align. Providing enhanced ESG screening, and market-leading equity exposure aligned with the EU Paris-Aligned Benchmark minimum requirements, these portfolios are an exciting addition to our product suite and the wider MPS space.”

Ashkan Daghestani, head of ETF, indexing, and smart beta sales for UK & Ireland at Amundi, added:We are pleased to be selected by EBI, which will enable more and more UK investors to have access to our low-cost SRI index-based solutions. This partnership demonstrates our commitment to meeting the needs of UK investors, in particular for ESG index solutions at competitive pricing.”

EBI is part of Bristol-based platform Parmenion and has £2.5bn in assets under management. It runs a range of passively managed investment products including a Core ESG and Earth range for sustainable investors, and factor-based global portfolios, the World range, and Core, for market-based global exposure.