M&G is launching a global infrastructure fund with a focus on ESG considerations.
The open-ended fund will aim to deliver a higher total return than the global equities market over any five-year period and an income stream that increases every year.
Benchmarked against the MSCI All Countries World index, the Global Listed Infrastructure fund will invest in listed infrastructure companies, investment trusts and Reits, and can hold up to 20 per cent in convertible bonds. It will generally hold less than 50 stocks.
The fund’s core investments will be companies involved in utilities, energy, transport, health, education, security, communications and transactions.
Manager Alex Araujo will use an active, bottom-up approach approach and look for companies with strong capital discipline and the potential for long-term dividend growth, and has the ability to use derivatives for hedging purposes.
With an eye on sustainability, the fund will avoid companies that derive more than 30 per cent of their revenue from coal-fired and nuclear power as well as industries such as tobacco, alcohol, adult entertainment, gambling and controversial weapons. United Nations Global Compact principles on human rights, labour, environmental and anti-corruption are also considered in the analysis of companies.
The fund launches on 5 October and will sit in the IA Global sector.