MAPFRE AM, MAPFRE’s asset manager, has highlighted its socially responsible investment funds, that is, funds driven by environmental, social and governance (ESG) criteria.
MAPFRE AM’s three such funds now exceed 100 million euros (plus another 100 million in a pension plan) according to the latest data as on December 31, 2019. Following the recent launch of MAPFRE Inclusión responsible, these three funds make the group the only asset manager with one product driven by each of the three components of ESG.
The first was launched in late 2017 under the name MAPFRE Good Governance. A total of 63 million euros has already been acquired, with a 16.77 percent return on institutional shares in the last twelve months and 7.6 percent on retail shares. The difference in profitability between the two tranches is explained by the fact that the fund was not made available to retailers until the end of January. This had been a good month on the stock exchange but subsequent months were weaker.
It is a global variable income fund
It is a global variable income fund whose portfolio includes companies with good corporate governance whose assets are temporarily undervalued by the market. Two studies by the University of Siena and the Cranfield School of Management confirm that investment in socially responsible and well-managed companies is more profitable in the long-term. By the end of the year, Unilever, Novartis and Vivendi were among the companies with the greatest weight in the portfolio.
In 2018, MAPFRE then launched Capital Responsable. Its assets currently amount to just over 35 million euros and it has provided an institutional class return of 6.08 percent and a retail class yield of 5.58 percent in the last twelve months. The fund seeks to preserve capital, but without giving up long-term growth, and thus, it has a balanced portfolio of fixed income assets and European shares (about 70 percent bonds and 25 percent shares).
The objective is to favor companies and entities that have a strategy committed to following the ESG criteria, under the assumption that these entities provide a more appropriate risk-return profile. MAPFRE also has a pension plan that replicates this fund and has aroused strong interest, given that its assets already exceed 100 million euros — the same as all three ESG funds together. Therefore, the funds and the pension scheme total over 200 million euros.
MAPFRE completes its range of ESG products with its Inclusión Responsible fund
MAPFRE completes its range of ESG products with its Inclusión Responsible fund, another mixed fund that invests in companies that promote the inclusion of people with disabilities. It has just been launched—starting with only 10 million euros of capital contributed by MAPFRE itself—but several institutional investors have already shown interest. The fund, which has been included in the report of the United Nations Global Compact as an example of best practice, combines the search for financial profitability with the promotion of improvements in society. In fact, the management team has carried out a historical simulation that shows that, over the last five years, the portfolio of companies selected for their promotion of inclusion was almost four times more profitable than the market as a whole. The asset management team, in collaboration with LFR, a French asset manager for which MAPFRE owns 25 percent of the capital, applies a methodology based on seven themes with 40 variables.
Therefore, MAPFRE AM not only focuses on financial profitability, but also on social profitability. Along these lines, in May of last year, it joined forces with SpainSIF, a platform that promotes responsible investment in Spain; it is also a signatory of the Principles of Responsible Investment (PRI), with the objective of aligning its investment policy with MAPFRE’s commitment to responsible social action.