What You Need to Know
- Dodge & Cox has launched the Dodge & Cox Worldwide Funds Emerging Markets Stock Fund.
- O’Shaughnessy Asset Management has introduced a set of new defensive and models on its custom indexing platform.
- Morningstar and Northern Trust have launched new tools to assess ESG standing of individual companies.
Dodge & Cox has launched the Dodge & Cox Worldwide Funds Emerging Markets Stock Fund, its first new fund in six years.
The actively managed fund invests selectively across a large, all-cap universe of emerging and frontier markets companies that the firm believes have a favorable outlook for long-term earnings and cash flow growth and appear to be temporarily undervalued. Many of these companies are not included in the MSCI Emerging Markets Index.
Under normal circumstances, the fund will invest at least 80% of its total assets in emerging market securities, including derivatives that have economic characteristics similar to such equity securities, and it may also gain exposure to emerging markets by investing in exchange traded funds.
The fund considers the economic and political stability of the country where the issuer is located and the protections provided to shareholders.
Its portfolio managers use the firm’s team-based approach to selecting undervalued companies, with a focus on fundamental research, individual security selection and low expenses.
“We are opening the Dodge & Cox Emerging Markets Stock Fund to provide its shareholders with access to the most compelling emerging and frontier market opportunities that we uncover as long-term, active investors,” said Charles Pohl, chairman and chief investment officer of Dodge & Cox, who noted that the firm also has has global stock and bond funds.
The fund is available in different share classes for in the EU, U.K. and U.S. , where its ticker is DOEMSUA. Its expense ratio is 0.70% at least through April 30, 2022.
O’Shaughnessy Expands Platform
O’Shaughnessy Asset Management (OSAM), has introduced a set of new defensive and dividend growth-oriented models on its custom indexing platform Canvas.
The new models include a range of options that focus on dividend growth or similar proxies and stability of sales, earnings and other key fundamentals which can be expressed across market caps and geographies.
They can be used as standalone or incorporated alongside other allocations like passive and fixed income and allow advisors to accommodate clients with greatly differing goals through one platform.
Advisors can customize the allocation for individual clients’ ESG/SRI considerations by excluding certain stocks and/or overweighting stocks of companies exhibiting positive actions. In addition, advisors can incorporate continuous tax management which targets maximum after-tax return.
“Originally advisors used Canvas to build model allocations across a spectrum of risk-tolerances or geographies and market caps,” said Patrick O’Shaughnessy, chief executive officer of OSAM “The new models help us add life-stage as a key variable for model development…. for advisors with clients looking to generate income and keep pace with inflation during retirement.“
Morningstar, Northern Trust Introduce New ESG Tools
Morningstar has added new environmental, social, and governance (ESG) assessments for asset managers and companies to its research, investors and advisor platforms. platform Morningstar DirectS and its investor website Morningstar.com.
The Morningstar ESG Commitment Level for strategies and asset managers assesses nearly 900 funds and more than 70 asset managers and is available on Morningstar Direct, Morningstar OfficeS, and Premium members of Morningstar.com. They will be added to the MorningstarAdvisor Workstation and Morningstar Analyst Research Center later this month.
The Morningstar ESG Risk Rating Assessment enables investors to easily compare and contextualize the overall ESG risk for companies across industries, and is now available for 13,000 companies in Morningstar Direct, Morningstar Office, Morningstar Advisor Workstation and for Premium members of Morningstar.com. It will also roll out to Morningstar’s equity data feeds later this month.
These ratings use the same easily recognizable and comparable globe iconography used in the Morningstar Sustainability Rating for funds, which Morningstar and Sustainalytics launched in 2016 as the market’s first fund-level sustainability rating.
The ESG Commitment Level evaluation reflects Morningstar manager research analysts’ qualitative analysis of the extent to which strategies and asset managers are incorporating ESG factors into their investment processes.
Morningstar reported assets into global sustainable funds neared $2 trillion in the first quarter of 2021, demonstrating steady growth over the past three years.
In related offering, Northern Trust Asset Management has introduced the ESG Vector Score, a measurement that assesses publicly traded companies in the context of financially relevant environmental, social and governance (ESG) related criteria that could impact their operating performance. It can be used in constructing and managing investment portfolios and stewardship activities.
The ESG Vector Score focuses on the magnitude and direction of key ESG related business issues likely to have a financial impact on companies and hence a portfolio’s performance.
The tool marries two leading sustainability disclosure standards and frameworks — the Sustainability Accounting Standards Board’s (SASB) Standards, which are industry-specific sustainability disclosure standards focused on financial materiality, and the thematic structure of the Task Force on Climate-related Financial Disclosures’ (TCFD) Recommendations.
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