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Schroders shelves second climate change fund after quant quirk

Schroders has put plans for a second climate change fund on hold after struggling to adapt the quant-based model to the market.

Chief investment officer Alan Brown says the fund – which was to be based on the work of Professor Rob Bauer at Maastricht University – was in the planning stages for an early launch this year.

But he says some of the research into company returns was period-specific rather than market-specific and is now out of date, meaning that returns were not being wholly replicated.

He says: “It has moved slightly off the table, which is a shame, given that we liked the idea of a quantitative model that did not reduce the opportunities in the market.’

Brown is bullish on the success of the global climate change fund since its launch in September. It has 7m of assets and is 5 per cent up since launch.

He says: “We are particularly pleased with the attraction from the institutional providers which is something we did not necessarily expect. It will take time, especially given market conditions, but we fully expect assets to rise as this will be a growing investment theme in the coming years.”

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