Q&A with James Harwood on the Russell Investments' Low Carbon Global Shares Fund
The "excitement" of the markets drew James Harwood to a career in finance and for the last 20 years he has worked across global equities and passive style management in London, Singapore and Sydney. Now, as a portfolio manager of direct investments at Russell Investments, he talks to Industry Moves about the recent launch of the firm's Low Carbon Global Shares Fund and how it differs to other funds on the market. He also touches on investors' appetite for responsible investments and the reason he'll be watching England's Ashes team with interest.
The "excitement" of the markets drew James Harwood to a career in finance and for the last 20 years he has worked across global equities and passive style management in London, Singapore and Sydney. Now, as a portfolio manager of direct investments at Russell Investments, he talks to Industry Moves about the recent launch of the firm's Low Carbon Global Shares Fund and how it differs to other funds on the market. He also touches on investors' appetite for responsible investments and the reason he'll be watching England's Ashes team with interest.
You have recently launched the Russell Investments Low Carbon Global Shares Fund. Beyond maintaining returns consistent with the MSCI ACWI index, what are you aiming to achieve with the Fund?
The Fund has been designed to provide investors with access to a broad range of global shares in developing and emerging markets with a 50% reduction in exposure to carbon emissions and fossil fuels compared to the benchmark index.
There is an increasing number of carbon-sensitive funds launching in the market. How does your fund differ?
The Fund harnesses our proprietary decarbonisation strategy. This strategy uses a holistic investment approach that encompasses companies' carbon footprint, carbon reserves, ESG score and a proprietary green energy ratio calculation to determine its inclusion and weighting within the fund.
Rather than simply applying a direct exclusion strategy, our approach enables the Fund to positively support companies with significant investment in green power generation and those with leading ESG scores.
In line with Russell Investments' cutting-edge research agenda, this Fund's strategy will be continually updated to reflect developing trends in the transition to a low carbon economy. This offers clients a long-term solution that adapts to changing market conditions within a risk controlled framework.
What appetite do you see for sustainable investment solutions in Australia and globally?
We have seen a strong appetite for responsible investment solutions from institutional investors, both in the superannuation industry and also amongst non-profit organisations.
Russell Investments has been working with clients for many years who are seeking to mitigate risks, respond to regulation and reflect their own responsible investment beliefs within their portfolios. Some of our Australian clients have been at the forefront of exploring low carbon solutions and determining ways to manage climate change risk within their portfolios.
In addition to the low carbon fund, what other quantitative strategies do you manage for clients?
I manage over $6 billion AUM in quantitative strategies across 14 accounts. Global equity Decarbonisation and domestic ESG strategies make up A$700m and are a strong growth area. Other strategies include centralised portfolio management (CPM); our high dividend Australian shares ETF; and Custom positioning strategies across equity factor portfolios.
This variety reflects the broad range of solutions we provide clients with - and encompass active, passive and smart beta vehicles to design the most effective portfolio to achieve client objectives.
In particular, the beauty of quantitative strategies is that they allow clients to gain specific targeted exposures to the investment factors that they believe will be rewarded (e.g. value, growth, momentum, low volatility) or, indeed, particular objectives like ESG and Carbon reduction.
Who do you most admire and how have they influenced your life/work?
My career has had a big influence on my life taking me to London, Singapore and now Sydney. I became interested in financial markets from an early age, especially as the growth of the London derivatives markets and global macro funds back in the early 1990s captivated me. I'd just started University when George Soros successfully bet on Sterling being devalued, and that fairly pivotal moment told me the excitement of financial markets was where I wanted to pursue my career.
What is the best advice you've been given?
The investment community is small; so always maintain professionalism and don't make enemies! This was true for London, and is even more the case in Australia.
Where did you grow up?
I grew up in Yorkshire in the UK, home to the finest cricketers in the world. I am looking forward to seeing how Joe Root leads England's Ashes team next month.
What is something that most people don't know about you?
I really enjoy being a father, and much of my spare time is spent with my kids. They are extremely fortunate to be growing up in Sydney with beaches on their door step. I think they would struggle to adapt to life in Yorkshire!
