LGT Capital has unveiled a sustainable equity market neutral strategy, Citywire Switzerland can reveal.
The LGT Sustainable Equity Market Neutral fund is managed by Marc Gonzales, an executive director and portfolio manager within the sustainable equities team.
The long portfolio is a replication of the firm’s existing sustainable LGT equity products, which includes LGT Sustainable Quality Equity Fund, LGT Sustainable Equity Europe managed by Ralf Piersig and LGT Sustainable Equity Global managed by Citywire AA-rated Christian Scherrer.
The fund implements dynamic allocation approach when it comes to LGT Sustainable Quality Equity fund and LGT Sustainable Equity Global. The initial allocation to both strategies is 40%, while it can go down to 20% and up to 60%.
However, the allocation to LGT Sustainable Equity Europe fund will always be 20%.
In the meantime the short portfolio replicates the reference indices of the sustainable LGT equity products via selling stock index futures and can change its position from -120% to -70%.
The sustainable screening for the fund is implemented with help of LGT's tool ESG Cockpit, which analyses around 4,400 companies worldwide based on around 40 key performance indicators.
Commenting on the fund launch, Gonzales said:
‘With this solution clients can reduce the overall risk of their investment portfolio while preserving return potential in the long term.’