John Hancock Investments has expanded its sustainable investment line-up with the launch of two funds focused on integrating environmental, social, and governance (ESG) issues with fundamental security analysis.
The John Hancock ESG Core Bond Fund and the John Hancock ESG International Equity Fund are managed by Breckinridge Capital Advisors and Boston Common Asset Management, respectively.
They offer exposure to the fixed-income and international equity markets, complementing John Hancock Investments' existing US equity-focused ESG funds.
John Hancock ESG Core Bond Fund invests in both corporate and taxable municipal debt, while John Hancock ESG International Equity Fund invests in developed- and emerging-market equities across the market capitalisation spectrum.
"This is an important milestone for John Hancock Investments in the ESG space," says Andrew G Arnott, president and CEO. "As a company, we're constantly looking for ways to deliver new investment solutions for our shareholders. To be able to offer not just two new funds but two new asset classes to socially and environmentally conscious investors is an exciting next step."
Over the past 20 years, ESG investing has grown from a niche market consisting of 55 funds that mostly excluded polluting corporations to more than 900 funds today representing a diversity of approaches. One testament to the growing momentum behind ESG investing is the creation of Principles for Responsible Investment, a leading proponent of ESG investing, which this year represented nearly 1,500 signatories and roughly USD60 trillion in invested assets.
The asset managers that John Hancock Investments selected to run these new offerings both have long histories in ESG investing. Founded in 1993, Breckinridge Capital Advisors, an independently owned investment manager with approximately USD27 billion in assets under management as of 30 September, 2016, focuses exclusively on high-grade fixed income, offering municipal, corporate, and government bond strategies.
Boston Common Asset Management, founded in 2003 and specialising in international equities, is dedicated exclusively to ESG investing, with approximately USD2 billion in assets under management invested across multiple strategies as of 30 September, 2016. The firm is employee owned, which offers an important measure of independence when pursuing shareholder advocacy initiatives, a key element of its ESG investment approach.
The new ESG funds are the latest product offerings from John Hancock Investments. Earlier this year, the company launched two US equity ESG funds, managed by Trillium Asset Management, the country's oldest investment adviser exclusively focused on sustainable and responsible investing; John Hancock Global Focused Strategies Fund, managed by Standard Life Investments; three target-date retirement funds; and new sector-specific exchange-traded funds, with underlying indexes designed by Dimensional Fund Advisors.