- The Osmosis Resource Efficient Core Equity Fund targets better risk-adjusted returns while reducing exposure to carbon, water and waste – resulting in a significantly lower environmental footprint relative to the benchmark
- The Fund is constructed utilising Osmosis’ proprietary environmental research, which identifies companies that are more resource efficient in creating economic value than their same sector peers
- The Fund’s A share class launched on 23 May 2017 and since inception has delivered an annualised excess net return of 0.80% with a tight tracking error of 70bps (see full disclosure in attached PDF)
- Osmosis’ total environmental assets under management are now approaching $2.5bn with over $1bn tracking its core suite of portfolios
Ben Dear, CEO, Osmosis
“This new partnership, which will give XP’s extensive customer base access to our flagship equity fund, further underscores the demand for our firm’s investment products. We are excited to have partnered with one of the leading financial institutions in the region. As demand grows for sustainable investment products, our unique approach suits those investors who wish to invest with an environmental focus while seeking better returns than the benchmark.”
Osmosis believes that to gain mainstream adoption, sustainable investment should not come at the cost of financial returns and that sustainability metrics, if quantifiable and objective in nature, can be applied to mainstream portfolios to generate alpha.
Climate change and pressure on natural resources, coupled with growing societal awareness, are drivers forcing corporates to implement sustainable production and business processes. Osmosis believes that those companies that are more resource efficient, having effectively monetised sustainability to the balance sheet, are more likely to outperform their peers over the long term. Quite simply, doing more with less will be rewarded.
The Model of Resource Efficiency
Through the development of its proprietary Model of Resource Efficiency, Osmosis is able to link corporate Resource Efficiency to economic value generation and financial performance, identifying a sustainable alpha signal. The Osmosis Resource Efficiency Factor is derived from an objectively driven research program and the unique approach focuses on reducing portfolio ownership of three key environmental metrics, Carbon, Water and Waste while targeting better risk-adjusted returns than the parent index.
Fabiano Cintra, Funds Specialists at XP
“This is another XP partnership to expand the offering of ESG products. Osmosis is a global reference in stock management and does a smart weighting choosing and putting more weight in companies that are better ranked in ESG criteria and that generate more value to their shareholders. Bringing this new option to the Brazilian investors highlights the XP leadership on this transformational front.”
About XP Inc.
XP Inc. is a technological platform for investments, financial services and educational purposes, and owner of brands such as XP, Rico, Clear, Infomoney, XPeed and Spiti, among others. XP Inc. has more than 2.8 million customers and R$ 660 billion of assets under custody. Over the past 19 years, the company has been transforming the Brazilian financial market to improve people’s lives, ensuring more transparent relations between customers and financial institutions. More information is available at: www.xpinc.com.