Since November 15, Raiffeisen Capital Management runs the new sustainability momentum fund. Other than established SRI products, which RCM manages for more than 30 years, the new fund is not just investing in companies with the highest ESG scores but also invests in companies that have increased their ESG scores and thereby their sustainability within the last three years.
After applying a strict catalogue of exclusion criteria, a Raiffeisen ESG score is calculated for each corporation. Doing so, RCM relies on external sources as well as the long-standing expertise of their management team in their internal analysis. Companies that do not achieve a minimum sustainability score are excluded. Based on the improvement in ESG scores within the last three years, an ESG momentum is calculated. Companies with a negative momentum, i.e. lower sustainability now compared to three years ago, are excluded as well. From the remaining corporations, about 50 shares are selected from the groups, momentum, stars and potentials.
Thereby, the sustainability momentum fund does not just invest in large corporations but especially in small- and mid-caps. Social responsibility can be analysed easier in those due to lower complexity and sustainability is integrated further due to risk aspects. Despite an outperformance of small caps over large caps, ESG small- and mid-cap funds are not very available to investors, says Raiffeisen Capital Management.