Clarity AI has performed analysis on 27,000 Article 6, 8 and 9 funds to identify any differences in performance and strategy.
The analysis sought to understand whether Article 9 funds would outperform Article 8 funds. Clarity AI found little variation between Article 9 and Article 8 funds across commonly used Principal Adverse Impact (PAIs) in their investment strategies. It also found that asset managers considering PAIs in an investment strategy, or not, had little effect on performance.
Not surprisingly, PAI appearance in investment strategy is not usual for Article 6 funds – less than a third include them. Mandatory PAI indicators do appear in the investment strategy of Article 8 and 9 funds, with Article 9 considering an average of 14, compared with an average of 11 for Article 8.
The top three PAIs used by Article 9 and 8 funds were found to be: exposure to controversial weapons; violations of UNGC principles or OECD guidelines for multinational companies; and exposure to fossil fuels.