Default investment strategies are designed to meet the needs of the majority of scheme members. The question facing HSBC was how to include environmentally-focused investments into the default that the Trustees and members wanted, without damaging investment potential.
We don’t just do the right thing for our clients, it’s something we believe in as a company
When there's no solution
we create one
We began by working with our client, generating ideas and selecting a fund manager. After carrying out some detailed research and discussing the challenge, we chose L&G, briefing them to design an investment fund that matched the environmental criteria members needed. We also needed a risk/return profile that, when it was included in the default strategy, was aligned to its overall objective.
Our Risk Assessment team and CIO delved into the figures, using our proprietary modelling and analysis to clarify the potential of the fund to produce good risk-adjusted returns in the future.
We completed the project with guidance on communications, to make members aware of the changes to the default strategy.
A new fund that fits the bill
Our dedicated team, along with L&G, successfully built and launched the LGIM Future World Fund. It’s a passive factor-based global equity fund, designed for DC schemes looking for an alternative to a traditional index strategy, while also addressing the long-term financial risks of climate change.
The fund allows HSBC members to reflect their views on climate change without sacrificing their future retirement income.