Manulife Climate Action benefits from a solid equity group that’s committed to its cash-flow-focused approach. The strategy is also available in Europe as Manulife Global Fund Global Climate Action and in the United States as John Hancock Global Climate Action JLFSX.
Manulife’s fundamental equity team attempts to construct a portfolio with a lower temperature impact and better performance prospects than the MSCI World. To begin, the team uses a two-pronged screen that excludes certain industries (such as fossil fuels, tobacco, or gambling) while identifying potential prospects through the lens of quality and valuation. The team sees cash flow return on invested capital as a sign of quality and free cash flow yield as a useful yardstick for valuation. An intensive restatement exercise (to reconstitute a company’s financials), qualitative assessments of management, and a careful examination of a firm’s economic moat all help them zero in on prospective investments.
Key Metrics for Manulife Climate Action Fund Series F
Lead manager Patrick Blais heads up a group with the necessary expertise. He’s been a part of the fundamental equity team for over 15 years and is trained in actuarial mathematics. Fellow manager Derek Chan holds a chartered professional accountant designation—fitting for a process that heavily scrutinizes financial statements. In all, it’s a reasonably seasoned group, with six of the eight members holding more than a decade of industry experience. Manulife’s sustainable investing team supplements this group by tracking potential controversies and each company’s emission metrics.
Blais and his colleagues have built a portfolio that stands out from the MSCI World Index, mainly in its underweighting of technology giants. The strategy didn’t add Nvidia NVDA until January 2024 or Meta Platforms META until January 2025, and both stakes are relatively light compared with their presence in the index. Those features have hurt recent performance, as those stocks have done relatively well.
That said, the strategy has done fairly well in its limited history. The F share class of the Canada-domiciled Manulife Climate Action gained 12.2% annualized from its April 2021 inception through May 2025, which ranked the fund in the global equity category’s top decile over that period. The fund sometimes struggles when commodities do well, as in 2022, but otherwise it has kept up nicely.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
