Scott Stobo of Equitable Life lifts lid on the thinking behind firm's latest ESG index segregated funds
Last week, Equitable Life expanded its suite of guaranteed investment fund options with a dozen new segregated funds.
Among its latest seg funds were the Equitable Life S&P/TSX Composite ESG Index Fund Select, the
Equitable Life S&P 500 ESG Index Fund Select, and the Equitable Life NASDAQ 100 ESG Index Fund Select, which makes it the first-ever Canadian insurer to include ESG index products in its lineup of GIFs.
“At Equitable Life, we've seen increasingly more interest from both our clients and our advisors in sustainable investment choices, with a lot of questions from them about what options we have in our lineup that would be sustainable,” Scott Stobo, Director Product Development, Savings and Retirement at Equitable Life told Wealth Professional.
“We’re also seeing significant growth in the sustainable investment based on industry statistics over the past decade, both in Canada and around the world, and we don’t see that slowing anytime soon.”
According to Morningstar’s report on the Sustainable Investing Landscape for Canadian Investors in Q2 2022, Canada-listed sustainable funds and ETFs saw $1.9 billion in collective net inflows, with 71% going to equity and 23% to fixed income strategies. A recent report from National Bank said Canada-listed ESG ETF products have more than doubled in the past two years, including Q1 2022 when a third of new ETF launches fell under the ESG category.
As a mutual insurance company, Equitable Life isn’t owned by shareholders, which means it considers the interests of clients, the community, and other stakeholders rather than focusing on shareholder profits. That multi-stakeholder mindset, Stobo says, makes ESG investing options a natural fit for Equitable Life’s shelf.
“We want to leave the world in a better place than we found it,” he says. “And so in addition to addressing client interests, we felt it made sense for us to have some sustainable investment options given our mutual structure.”
The decision to partner with Invesco to unveil the industry’s first-ever ESG index options for seg funds also speaks to the needs of many investors who are interested in getting index returns. While Equitable Life offers other active ESG investment options, it also sees a benefit in getting performance that tracks relatively closely to the broader stock markets, with the added benefit of encouraging sustainability.
Aside from its ESG Index segregated funds, Equitable Life’s lineup of new guaranteed investment funds includes options to gain access to alternative asset classes, including the Equitable Life ClearBridge Sustainable Global Infrastructure Income Fund Select, and the Equitable Life Dynamic Global Real Estate Fund Select.
“It's definitely a gap where we're trying to make sure we have some of the better options out there,” Stobo says. “We wouldn’t say we’re unique. But I think it helps us to be more at the forefront of the industry.”