French asset manager Clartan Associés has partnered with Swiss investment firm Ethos Services to launch a new sustainable equity strategy for private and institutional investors.

The Luxembourg-domiciled fund, which is formally known as the Clartan Ethos ESG Europe Small & Mid Cap fund, will invest in small and medium-sized European stocks that implement social and environmental aspects into their business models.

The strategy will invest in an average of 500 European companies with a market capitalisation of up to €20bn. Both asset managers will apply extra-financial and financial criteria to their selection processes.

Ethos will pre-select the companies whose products and services have a positive impact on the environment and society as a whole will be eligible for inclusion in the fund.