London, 3 August 2020: Fulcrum announces the launch of the Fulcrum Climate Change Fund (FCC). The Fund is a diversified, global equity fund and is aligned with the Paris Agreement’s target of keeping the global temperature rise this century below 2 degrees Celsius. Launch AUM is expected to be £70 million.
This is one of the first active global equity funds to be climate-aligned (i.e. committed to having a portfolio temperature below 2 degrees as per the Paris Agreement target) and is designed to provide investors with diversified exposure to the global equity market, whilst maintaining a weighted average portfolio temperature of below 2 degrees.
The Fund is expected to hold between 150-200 stocks invested across 25 themes, with no company in the portfolio having a higher temperature than 2.5 degrees.
Climate change has been a core investment theme in the Fulcrum Diversified Absolute Return Fund and will be strengthened with the launch of this stand-alone fund.
Fulcrum has worked with environmental transition experts, Iceberg Data Lab, to create a product that is designed to be in line with science-based international best practice. The Fund is also a product of collaboration with Arvella Investments which, after an extensive yet fruitless search for an established diversified equity fund aligned with the Paris Agreement, turned to Fulcrum for a solution.
The Paris Agreement highlights the importance of making financial flows consistent with low-carbon pathways. The Fund is designed to contribute to the re-allocation of capital by maintaining a portfolio temperature of below 2-degrees. This is achieved by investing in companies that are “on-track” to meet the Paris Agreement’s temperature target. Fulcrum will also engage with companies to encourage further decarbonisation, climate-related disclosure and climate target setting. If all companies adopted their sector’s existing best practice, the world would be much closer to mitigating global warming.