Wellington Management has announced the launch of the Wellington Climate Market Neutral Fund. This UCITS Fund will invest in a broad range of climate-oriented themes, such as clean technology and sustainable transport, seeking to identify a diversified set of climate-advantaged and climate-disadvantaged companies in which to take active equity positions.¹

The Fund seeks absolute returns, primarily investing via long and short positions in companies globally, based on the assessment of relative-value opportunities between climate-advantaged companies and climate-disadvantaged companies. We will generally establish long positions in climate-advantaged companies that we believe, on a relative basis, have a strong or improving position with respect to climate mitigation (addressing the causes and minimising the possible impacts of climate change) and/or climate adaptation (aiming to reduce the negative effects of climate change or helping communities adapt to the impact of climate change), and short positions in climate-disadvantaged companies with a relatively weak or weakening position with respect to climate mitigation and/or climate adaption.

The Fund aims to achieve market-neutrality with implementation flexibility (long and short positions) that may protect capital during periods when sectors such as traditional energy rally and sectors such as clean technology underperform.

The Fund will be managed by Alan Hsu, Managing Director and Equity Portfolio Manager, who has spent 13 years at Wellington conducting fundamental analysis and research on the utilities, energy and renewable energy and clean technology sectors. He works closely with the firm’s experienced Global Industry Analysts and ESG Research Team. The strategy leverages Wellington’s partnership with Woodwell Climate Research Center, the world’s leading independent climate-research institute. This partnership aims to integrate climate science and asset management to help meet growing institutional and wholesale demand for sustainable investing.

Stefan Haselwandter, Senior Managing Director and Head of Client Group, commented: “Climate investing is not just about understanding the impact of changing weather patterns, but also how technology, regulations, policies, financial reporting and consumer preferences will evolve to address climate-related problems and opportunities. At Wellington, we believe that most companies have a degree of climate exposure, but not all companies are positioned to respond to climate risks and opportunities, creating relative winners and losers in the market. As evidence of climate risk mounts over time, we believe this presents an increasing and dynamic long/short investment opportunity set.

“The launch of the Fund demonstrates our conviction that investing in ESG initiatives will help deliver competitive absolute returns for our clients. With the expansion of our UCITS fund platform, we believe Wellington continues to offer investors the flexibility to pursue a wide range of investment objectives.”

Investors should consider the risks that may impact their capital, before investing. The value of investments may fluctuate from the time of the original investment.

¹This Fund is classified as an SFDR article 8 Fund, defined as products which have, among other characteristics, environmental or social characteristics as defined under Article 8 of SFDR. The Fund does not have a sustainability-related investment objective. While climate factors are a consideration when determining allocations to individual companies, the team will not necessarily exclude investments on the basis of climate risk. The Fund may make short investments in companies with a relatively weak or weakening position with respect to climate mitigation and/or adaptation and consequently may profit from the negative effects of climate change. The majority of the long equity exposure of the Fund will be to companies that are positively contributing to one or more of the United Nations’ Sustainable Development Goals. The Fund is not constructed relative to a benchmark. The ICE Bank of America Merrill Lynch 3-Month T-Bill Index serves as a cash benchmark for performance fee purposes.

Risks
Capital: Investment markets are subject to economic, regulatory, market sentiment and political risks. All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment. The Fund may experience a high volatility from time to time. | Concentration: Concentration of investments within securities, sectors or industries, or geographical regions may impact performance. | Currency: The value of the Fund may be affected by changes in currency exchange rates. Unhedged currency risk may subject the Fund to significant volatility. | Derivatives: Derivatives may provide more market exposure than the money paid or deposited when the transaction is entered into (sometimes referred to as Leverage). Market movements can therefore result in a loss exceeding the original amount invested. Derivatives may be difficult to value. Derivatives may also be used for efficient risk and portfolio management, but there may be some mismatch in exposure when derivatives are used as hedges. The use of derivatives forms an important part of the investment strategy. | Emerging markets: Emerging markets may be subject to custodial and political risks, and volatility. Investment in foreign currency entails exchange risks. | Equities: Investments may be volatile and may fluctuate according to market conditions, the performance of individual companies and that of the broader equity market. | Hedging: Any hedging strategy using derivatives may not achieve a perfect hedge. | Leverage: The use of leverage can provide more market exposure than the money paid or deposited when the transaction is entered into. Losses may therefore exceed the original amount invested. | Liquidity: The Fund may invest in securities that are less liquid and may be more difficult to buy or sell in a timely fashion and/or at fair value. | Long-short strategy: The Fund could encounter higher losses if its long and short exposures move in opposite directions at the same time and both in an unfavourable way. | Small and mid-cap company: Small and mid-cap companies’ valuations may be more volatile than those of large cap companies. They may also be less liquid. | Investment in China: Changes in Chinese political, social or economic policies or securities law and regulations may significantly affect the value of the Fund. Chinese securities may be subject to trading suspensions which could impact the Funds investment strategy and affect performance. Chinese tax law is applied under policies that may change without notice and with retrospective effect. | Shanghai-Hong Kong stock connect: Allows access to certain China A Shares listed on the Shanghai and the Shenzhen Stock Exchanges, securities could be recalled from the scope of the program which could restrict the Funds ability to implement its investment strategy effectively. The program is subject to quota limitations which may restrict dealing on a timely basis. Trading is subject to China A Share market rules, foreign shareholder restrictions and disclosure obligations and changes to laws, regulations and policies in China may affect share prices of securities held. | Short selling: A short sale exposes the Fund to the risk of an increase in market price of a security sold short; this could result in a theoretically unlimited loss. | Sustainability: An environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.

Please refer to the Fund offering documents for additional information on the risks associated with investing.