Vontobel is expanding its suite of ESG bond funds with two products: an impact green bond fund and a sustainable emerging markets debt fund. The asset manager revealed in a press release that these new vehicles seek to meet growing investor demand for solutions that combine the goal of providing “attractive income with a sustainable approach”.
The Vontobel Fund – Green Bond invests across a global universe of green bonds, identifying issuers who use proceeds mainly for eligible environmental projects with a measurable impact in the transition to a low-carbon economy. It aims to maximize the contribution to climate change mitigation and environmental protection, while generating steady income over a full economic cycle.
Under SFDR regulations the fund qualifies as an article 9 fund and will be available in Austria, Switzerland, Germany, Spain, Great Britain, France, Italy, Luxembourg, Liechtenstein, the Netherlands, Portugal, Sweden and Singapore.
Vontobel highlighted that, supported by a team of more than 40 investment and ESG specialists, Portfolio Managers Daniel Karnaus and Anna Holzgang make high-conviction decisions based on in-depth analysis of credit quality, green bond projects, relative-value and macro factors. The fund follows a disciplined investment process, whereby only a select number of green bonds are eligible for investment, resulting in a concentrated portfolio.
“Climate change is a real financial risk for investors, and green bonds provide an effective tool to address it. The fund’s impact is also measurable. For every 1 million euro invested in the fund, we estimate that we reduce carbon emissions equivalent to 492 t CO2 equivalent, or about 206 fewer passenger cars on the streets per annum”, says Karnaus.
Meanwhile, the Vontobel Fund – Sustainable Emerging Markets Debt invests mainly in government, quasi-sovereign and corporate bonds that demonstrate an ability to manage resources efficiently, as well as managing ESG risks. To find attractive opportunities, a proprietary ESG scoring model, based on a best-in-class inclusion as well as sectoral exclusion, is at the core of the investment process. Under SFDR regulations, the fund qualifies as an article 8 fund. The firm notes that this strategy is registered for sale in Austria, Switzerland, Germany, Spain, France, Italy and Luxembourg.
Supported by a team of nine emerging markets analysts and three ESG specialists, Portfolio Manager, Sergey Goncharov, focuses on optimizing the level of spread for a given level of risk. Utilizing an in-depth research and a proprietary valuation model, the team compares the risk vs return potential across issuer qualities, countries, interest rates, currencies and maturities within their investment universe to identify the most rewarding opportunities.
“As fixed income investors, a key part of our toolkit is our engagement with issuers. Engagement is extremely powerful in filling information gaps, particularly in emerging markets, where companies and countries may be less advanced in terms of ESG. A simple conversation can raise awareness and promote the importance of considering ESG risks among new issuers”, asserts Goncharov.
Por Funds Society, Madrid
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