Innovative Water Security Fund Launched in Luxembourg

The world's first Water Security Fund launched in Luxembourg on 22 March 2019.

In the context of the United Nations World Water Day, Thomas Schumann Capital & FARAD-Group have launched the Water Security Fund, the first global responsible investment fund to invest in public companies that embrace water security, exhibit social, environmental and financial responsibility.

The Water Security Fund will track the world’s first benchmark index, the Euro Water Risk Index, to price financial water risk in securities. Combined, both instruments are set out to encourage responsible water management within public companies. The Water Security Fund is the world’s first non-thematic fund to pursue UN Sustainable Development Goal #6.

The Water Security Fund aims to capture and protect alpha, reduce volatility, create long-term capital appreciation and social and environmental returns. Every security is exposed to financial water risk which until recently had no viable tool or methodology to assess and price this risk. More and more investors are trying to integrate water risks into their strategies but they are currently using limited data. The Euro Water Risk Index and the aligned Water Security Fund seek to bridge the gap. Ostensibly, the fund aims to address financial water risk and exemplary water stewardship in three ways: by providing access to the investment opportunity represented by companies which embrace sustainable and responsible water management; by integrating ESG criteria in the investment process, water security is essential to guarantee the well-being of citizens and tackling climate change; by providing a means by which to measure and hedge against idiosyncratic financial water risk in portfolios.

The Water Security Fund launches on 22 March from Luxembourg on FARAD-Group‘s new GreenEthica Business Unit: the only B2B platform dedicated to sustainability.