Aviva Master Trust adopts fully integrated ESG default strategy

The Aviva Master Trust has adopted My Future Focus, which fully integrates environmental, social and governance (ESG) factors into its design, as its standard default investment strategy.

The strategy offers both ESG-titled passive and actively managed funds from Aviva Investors’ multi-asset team, and invests across a diversified range of asset classes.

These include developed and emerging market equities and government bonds, sterling and global corporate bonds, and property and high yield bonds.

ESG factors in particular are integrated into the solution in multiple ways, including integration into the investment process when investing in Aviva Investors’ actively managed funds, and excluding companies which derive a certain level of revenue from controversial weapons and civilian firearms.

Furthermore, where it invests in passively managed regional equity funds, the solution uses ESG research to tilt these funds towards those companies with a higher ESG score by discarding those ranked in the lowest 10 per cent.

Aviva Investors will also use its influence through engagement and voting to promote sustainable business practices, gain insight and reduce investment risk.

The ESG integration within My Future Focus has already been running for 12 months and trustees have developed bespoke reporting information with Aviva Investors to monitor its effectiveness.

Commenting on the announcement, Aviva Master Trust trustee and Investment Sub-Committee chair, Jon Parker, stated: “As independent Trustees of the Aviva Master Trust we are passionate about ESG and focussed on ensuring that we are providing our members with default solutions that deliver strong risk adjusted returns whilst investing responsibly and sustainably in alignment with our ESG beliefs.

“ESG is not just about environmental principles, it’s also about the reduction of investment risk for our master trust scheme members.

"We believe that over the long-term companies with strong ESG credentials will outperform companies that do not take their ESG responsibilities seriously.

“My Future Focus provides our members with a really strong and differentiated default solution that meets these objectives at a very competitive cost."

Aviva also confirmed that the previous default strategy, My Future, will be retained as an alternative default for those employers who do not wish to move, and will continue to be regularly reviewed and overseen by trustees.

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