As one of the largest asset managers in mainland China and a signatory to UN-backed Principles for Responsible Investment (PRI), E Fund embraces and implements responsible investments with the focus on long term sustainability. We define responsible investment as a practice of incorporating environmental, social and corporate governance (ESG) information into our entire investment processes and investment decision making, in addition to the traditional financial return considerations.
Our responsible investment statement covers all major investment teams, including active equity/quant, fixed income and index investment. The statement is updated annually, to reflect our dynamic business and keep up the changes in the market environment.
Our active ownership statement describes in more details on E Fund`s approaches to active ownership practices, including how we engage with investee companies and how we exercise our voting rights. We proactively engage with listed companies and bond issuers, voting in support of appropriate ESG resolutions.
E Fund became a signatory to the PRI in early 2017 and has pragmatically practiced responsible investment and green finance in corporate governance, investment and research process, product and strategy, financial technology, domestic promotion, and international cooperation. Below are E Fund’s company-level ESG milestones:
In 2017, E Fund became a signatory to PRI, joined ACGA (Asian Corporate Governance Association), and launched its first environmental-themed fund.
In 2018, E Fund launched its first ESG equity strategy with its strategic partner APG, became UK-China Environmental Disclosure Pilot Member, and initiated its Ark.ESG fin-tech platform.
In 2019, E Fund launched an ESG fixed income product with APG and an ESG equity mutual fund.
In 2020, E Fund released the first editions of its responsible investment statement, active ownership statement. It also joined Climate Action 100+ and became a public supporter of TCFD recommendations.
In 2021, E Fund launched a series of ESG-themed products, including low carbon, new energy, Electric Vehicle ETF products. It also started calculating and planning its own carbon emission at the company level.
E Fund believes in and recognizes the importance of addressing climate related risks and opportunities and natural loss issues (deforestation, water, oceans and biodiversity) during responsible investing. Since 2020, we have been a public supporter of the TCFD recommendations and the Paris Agreement. And we actively conduct collaborative engagement on climate topics as a signatory to the Climate Action 100+ Initiative.
To facilitate the uptake of responsible investment in the company, E Fund has engaged external consultants to provide trainings and workshops for our portfolio managers and senior management.
On the reporting and disclosure side, we regularly share ESG approaches, metrics, indicators, voting records and other relevant information of specific portfolios regularly per our clients’ requests, in accordance with laws, regulations and contractual requirements.
*Note: As of June 30th, 2022, E Fund's AUM in non-money market funds and short-term funds ranked as the Top 1 in China's industry.
E Fund practices responsible investment through two major aspects: ESG incorporation and active ownership.
The approach includes: Exclusion, ESG integration and Engagement.
We exclude companies whose practices are fundamentally misaligned with our ESG principles. The ESG exclusion criteria reject companies involved in tobacco, gambling, nuclear or cluster weapons, bribery, severe safety incidents, and pollution penalties, etc. We also tailor-make exclusion rules based on our clients' requests. For ESG-specific products, we may further exclude sub-sectors that are deemed with high risk and impact.
In addition to traditional financial analysis, we systematically integrate material ESG factors into our research processes and investment decisions, which helps to reveal hidden risks and achieve better risk-adjusted returns. Our proprietary ESG assessment framework consist of multi-level material ESG factors, with data and information collected and aggregated by our AI-powered ESG technology platform Ark.ESG.
We engage with listed companies/bond issuers and work with relevant stakeholders, such as NGOs and communities to improve the sustainability of the investees' business practices and push for positive changes over time. To achieve this, we meet with investees’ management regularly and communicate our expectations on ESG matters such as corporate governance and climate change. We also vote in support of ESG-related motions and resolutions following our voting policy.
For active equity/quant and fixed income, implementation of responsible investment takes place through exclusion, ESG integration, and engagement.
For index strategies, the research and investment teams actively communicate with index providers and related research institutes.
For index enhanced funds, exclusion strategy also works when selecting from stock pool and underlying stock’s weight within portfolio can be adjusted based on ESG scores.
USD 79.37 million
(RMB 512.75 million)
USD 553.66 million
(RMB 3.58 billion)
USD 19.12 million
(RMB 123.54 million)
USD 35.56 million
(RMB 229.7 million)
USD 27.87 million
(RMB 180.02 million)
Fund investment has risks. The specific risks of the Fund include: The systematic risk of stock market due to high and relatively stable stock positions; the Fund’s assets are mainly invested in the stocks selected based on the ESG responsible investment approach, the incorporation of ESG responsible investment concept into investment decisions does not mean a certain return on the Fund, and the defects of ESG responsible investment approach will also affect the performance of the Fund to a certain extent. Investors should carefully read the legal documents for the Fund including the Fund Contract and the Prospectus before investing in the Fund, to fully understand the risk-return characteristics of fund products. Based on the understanding of product profile and listening to the advisor's opinions on appropriateness, investors should make independent decisions on fund investment and select appropriate fund products according to their own risk tolerance, investment period and objectives.