Federated Hermes launches ESG-led global equity fund

Federated Hermes has expanded its Australian wholesale offering with the launch of the Federated Hermes Global Equity Fund, as investor demand for globally diversified strategies with integrated ESG considerations continue to grow.

The fund, now registered for sale to wholesale investors and adviser clients in Australia, combines fundamental global equity investing with ESG integration through a proprietary framework incorporating stewardship insights from Federation Hermes's EOS engagement business.

The launch marks Federated Hermes' second wholesale fund introduced to the Australian market this year, following the February rollout of its Global Trade Finance Fund. The firm already has a sizeable institutional footprint locally though its stewardship arm, EOS at Federated Hermes, which advises on approximately US$2.3 trillion (AU$3.38 trillion) in assets globally. This includes mandates linked to several of Australia's largest superannuation funds.

Benchmarking against MSCI World ex Australia Index, the strategy will typically hold between 250 and 500 stocks selected through a systematic and data driven investment process supported by fundamental oversight from the portfolio management team.

The strategy also integrates a proprietary ESG framework incorporating engagement insights from EOS, alongside Federated Hermes; multi factor risk model, MultiFRAME, which is used to manage portfolio risk and balance exposures across the portfolio.

Geir Lode, who leads the global equities team and serves a lead portfolio manager for the strategy, said heightened macroeconomic volatility continues to create opportunities across global markets.

"Our disciplined, risk aware approach aims to identify resilient businesses that look attractive across multiple dimensions and avoid material weaknesses, while controlling risk and maintaining balanced exposures," Lode said.

The strategy has been managed since 2007 and oversees approximately US $5.8 billion in assets globally.

Associate director of business development Liz White said the launch reflects growing demand among Australian wholesale investors for broader global diversification beyond domestic equities.