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Creating positive impact through purpose-driven investment: AIA Sustainable Multi-Thematic Fund

AIA Singapore enables investors to align their investments more closely with their personal values and enjoy potential returns.

Over the last few years, calls from the international community for businesses to anchor their practices on sustainability principles have been loud and clear. Investors in Singapore are no exception to this with more investors gaining a better understanding and appreciation for the importance of sustainability considerations when it comes to making the right investments.  

In line with this trend, more investors are now focusing on investing in funds that enable them to play a role in creating a better tomorrow. In practice, this means investing in value propositions that can help address the global challenges, such as climate change and global warming. Investors are looking for opportunities to support companies that prioritise sustainability and actively pursue sustainable, ethical business practices.

Sustainable investing (SI) can be beneficial for investors as it mitigates investment risks by identifying opportunities and helping investors to build potential long-term returns based on ESG principles. Sustainable investing (SI) also enables investors to be more proactive and intentional in influencing positive change in the environment and society.

To meet the evolving expectations of its customers, in November 2022, AIA Singapore launched the AIA Sustainable Multi-Thematic Fund, the first bespoke sustainable thematic fund in partnership with Robeco to the Singapore investment-linked products (ILP) market. Robeco is a leading Netherlands-based investment firm which has been at the forefront of sustainable investing since 1995.

Liu Chunyen, Chief Investment Officer of AIA Singapore, said, “At AIA Singapore, we embrace our responsibility to take a leading role in contributing to the sustainable development of the region. One of the ways we do our part is by integrating sustainability considerations into our investment strategy and offerings. We take sustainability considerations seriously in our investment process and integrate these factors into our investment decisions, which is reflected in our bottom-up security research process. 

AIA Sustainable Multi-Thematic Fund, the first in the ILP market provides investors access to purpose-driven investment where they can influence positive changes in society. The bespoke fund also aims to maximise investment outcome over the medium to long investment horizon and is offered through AIA's select investment-linked products.”

Measurable positive impact

The AIA Sustainable Multi-Thematic Fund seeks to manage market volatility through an optimally diversified portfolio construction and active management, to maximise risk-adjusted return and provide stable long-term performance.

Centered on sustainable outcomes, the bespoke fund invests in companies which offer products and services that make positive contributions to one of six key themes namely, Sustainable Water, Smart Materials, Smart Mobility, Circular Economy, Sustainable Healthy Living, and Smart Energy. The companies invested in also contribute to at least one of the 17 United Nations Sustainable Development Goals (SDGs). 

The selected companies are those that are positioned to benefit as the world gradually shifts towards a more sustainable future. They are primed to experience longer-term growth as demand for their products and services increase. Their business models are also overall more resilient, enabling them to better withstand market volatility and changes in consumer preferences.  

Based on the possibility of these factors combined, companies that the fund invests in are potentially expected to thrive in the coming years and contribute to a more sustainable future, which may also result in an increase of the investment portfolio value over a multi-year time frame. 

Investors will also be able to participate indirectly in sustainability efforts in the local community as part of AIA Singapore's Green Pledge to help create more urban green spaces across the city. The company will plant a tree for each customer who purchases from a select range of AIA investment-linked products from 24 November 2022 to 31 December 2023 and invests in the AIA Sustainable Multi-Thematic Fund for a period of at least six months. 

Sustainability considerations to mitigate potential risks

Investment decisions made through the AIA Sustainable Multi-Thematic Fund are based on Robeco’s capability in SI research that identifies financially-relevant information, which is then integrated into the investment processes and decision-making in relation to various of their investment funds. Their approach and goal is to make investment decisions based on sound research and analysis of the potential impact of sustainability factors on financial performance.

By considering sustainability factors alongside traditional financial analysis, the fund aims to identify companies that are better positioned to succeed over the long-term due to their commitment to sustainable business practices and growth potential. The fund excludes certain sectors and companies with unsustainable business practices. This approach is consistent with the growing trend towards sustainable investing and the recognition that companies which prioritise sustainability are better positioned to generate long-term value for their investors.

Safeguard shareholder interest and create value

The AIA Sustainable Multi-Thematic Fund aims to also promote good governance in investee companies. One of the ways it does this is through active participation in shareholder voting which can influence the decisions made by companies and promote responsible behaviour.

In addition to this, the fund has a value engagement programme, which involves actively engaging with the companies it invests in to encourage them to adopt sustainable business practices and improve their conduct of business. By doing so, the fund seeks to create even greater value for both its shareholders as well as the society and environment.

Better investment decisions, better potential returns

An increasing number of companies are adopting sustainable business practices—and for good reason – as it benefits the individual company. Companies that work towards sustainability may potentially reap the rewards in the long-run.

Investors can access the AIA Sustainable Multi-Thematic Fund through AIA Singapore’s select range of investment-linked products which include AIA Pro Achiever 3.0, AIA Pro Lifetime Protector (II), and AIA Invest Easy on cash or supplementary retirement scheme (SRS).

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