LOIM Launches New U.S. and Japan Net Zero Equity Funds

Global wealth and asset manager Lombard Odier Investment Managers (LOIM) announced the expansion of its TargetNetZero (TNZ) platform of decarbonization-focused investment strategies, with the introduction of two new strategies, TNZ US Equity and TNZ Japan Equity.

The new funds follow the initial launch of LOIM’s TNZ franchise in 2021, with the platform now reaching over $6.8 billion in AUM across 11 pooled funds and numerous bespoke solutions in equities, fixed income and cash solutions.

LOIM’s TNZ equity strategies are designed to be “benchmark aware,” providing diversification and low tracking error, while aligning with the Paris Agreement’s target to limit global warming to 2°C or below, enabling investors to meet financial and sustainability objectives. The strategies identify credible transition leaders across all sectors, including hard-to-abate industries, utilizing LOIM’s proprietary Implied Temperature Rise (ITR) methodology to build portfolios engineered to maintain temperature alignment below 2°C, while materially reducing greenhouse gas (GHG) emissions relative to the benchmark. The ITR tool analyses a company’s net zero alignment and translates the findings into a metric expressed in degrees Celsius, considering whether the projected emissions of the company are increasing, flat or decreasing quickly and credibly enough to meet the Paris Agreement goals.

According to LOIM, the launch of the new strategies reflect growing demand for climate-aligned exposure to US and Japan equities. The TNZ US Equity strategy is benchmarked to the MSCI USA Index and can hold between 300 and 350 companies in the portfolio, while TNZ Japan Equity is benchmarked to the MSCI Japan Index and can hold between 100 and 150 companies.

Yannik Zufferey, Chief Investment Officer, Core Business at LOIM said:

“The transition to net zero will not be driven by exclusions, but by directing capital towards companies that are credibly transforming. The growth of our TargetNetZero franchise reflects the increasing demand for solutions that support this transition without compromising diversification.”