In a statement, product owner GAX MD Sdn Bhd said the portfolio will invest primarily in ESG-related equity ETFs, particularly those that have an investment policy that takes into consideration ESG issues.
This includes ETFs that have a balance of executives and directors with regards to gender and racial diversity, strict anti-corruption policies and strong internal controls in place.
"This will allow investors to align their financial goals with the values that they strongly believe in as they start to look beyond balance sheets and profit or loss statements to identify investments that are responsible and sustainable," it said.
The Global Sustainable Investment Alliance (GSIA), in its latest Global Sustainable Investment Review (GSIR) biennial report, revealed an increase of 15% in the assets under management (AUM) of sustainable investments from US$30.68 trillion in 2018 to US$35.50 trillion in 2020.
It also projected that ESG assets could exceed US$50 trillion by 2025.
China and countries in the Asia-Pacific region are expected to contribute double digit compounded annual growth to responsible investment markets in the near future.
According to Gax MD CEO and managing director Ronnie Tan, the rollout of the MYTHEO Global ESG was timely as investments in the ESG space is gaining momentum, at a time when the Covid-19 pandemic laid bare social and economic issues, which further strengthened the need for more sustainability practices and good governance.
"Through MYTHEO Global ESG, we want to provide a mechanism to contribute to the realisation of a sustainable society through digital investment management for investors who wish for a healthier future environment, a just and equitable society, sustainable corporate practices, and good governance.
“There is a need to balance between social and economic returns. We believe that a company with high ESG and corporate values can expect to achieve good economic returns over the long term,” he said.
Tan added that funds with ESG mandates have demonstrated resilience in times of market uncertainties, especially due to the outbreak of Covid-19 last year.
Quoting figures from Refinitiv Lipper, he said ESG-related funds delivered an average higher overall outperformance of 3.78% as compared to 2.15% for conventional funds for the year 2020.
The MYTHEO Global ESG portfolio currently has 11 ETFs in its investing universe with an exposure of 49.95% in the US and 50.05% globally.
The performance for this ESG portfolio was back-tested all the way to July 2006, which yielded an annualised net return of 9.27% as compared to the MSCI ACWI Index at 8.93%.
However, GAX MD cautioned that the past performance is not an indication of future performance.
Existing MYTHEO investors can create a new portfolio for the MYTHEO Global ESG using their existing accounts.
New users can log on to mytheo.my or download the MYTHEO app from the App Store of Play Store.