AHL TargetClimate (the ‘Programme’) is a risk managed, multi-asset Programme that aims to align with the global transition to a low-carbon economy. The Programme primarily trades a long only portfolio allocating to various asset classes including equities, corporate bonds, green bonds, government bonds, and commodities considered aligned with the green transition. A hedging futures portfolio is enacted from time to time to hedge investment risk in difficult markets.

AHL believes it’s ability to design and implement a climate integrated strategy across multiple asset classes is unique. The key value proposition, in our opinion, is

1. Multi-asset approach. In the industry, it is typical for ESG assets to be focused solely on equities. AHL has been exploring new markets since its inception in 1987 and AHL TargetClimate applies climate principles across equities, credit, governments and commodities, with the potential to add more over time.
2. Data driven security selection. AHL benefits from Man Group’s advanced data science platform and centralised RI team to onboard and analyse ESG data. The goal is to select those securities most aligned with fighting climate change.
3. Active Risk management. AHL’s proprietary risk management framework aims to cut risk in difficult markets. The aim is to participate on the upside, while protecting on the downside. This approach has been successfully implemented via our TargetRisk programme for many years, targeting an improved Sharpe ratio and reduction in drawdowns, as compared to a traditional equity/bond portfolio, such as the 60/40.

Systematic techniques, which are featured in other AHL products, are used to actively adapt risk exposures as appropriate for the market environment and to preserve capital during market sell-offs.