Transamerica Multi-Managed Balanced has a number of attributes that may meet the expectations of sustainability-focused investors, despite some issues worthy of attention.
Transamerica Multi-Managed Balanced's holdings are exposed to average levels of ESG risk relative to those of its peers in the Moderate Allocation category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
One key area of strength for Transamerica Multi-Managed Balanced is its low Morningstar Portfolio Carbon Risk Score of 7.0 and low fossil fuel exposure of 5.99% over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy.
One potential issue for a sustainability-focused investor is that Transamerica Multi-Managed Balanced doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. The fund exhibits relatively high exposure (9.61%) to companies with high or severe controversies. Companies with high or severe controversies may be involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.