ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria.
Asset manager Amundi has launched an emerging markets green bond strategy, the Amundi Funds Emerging Markets Green Bond. It will invest in green bonds issued in hard currency – primarily by corporates – as well as offering some exposure to sovereigns in India, China, Brazil and Indonesia. By making green bonds more widely available to investors, additional private capital can be better mobilised for the energy transition, mitigation the adverse effects of climate change, Amundi said. “Investors are increasingly looking for solutions that deliver yield and have a positive impact on the environment. Emerging market green bonds are particularly well-suited to capturing both of these opportunities,” said Yerlan Syzdykov, Head of Emerging Markets at Amundi.
Legal & General Investment Management (LGIM) has bolstered its fixed income ETF range with the launch of the L&G ESG Green Bond UCITS ETF, which will be available to investors in the UK and Europe. This follows the launch of the L&G ESG USD Corporate Bond UCITS ETF and L&G ESG Emerging Markets Corporate Bond UCITS ETF in January. The ETF will track the JP Morgan ESG Green Bond Focus Index, and will incorporate the Climate Bonds Initiatives green bond certification process. “As questions mount on how ‘green’ some bond issues in the market may be, the incorporation of the Climate Bonds Initiatives certification process into the design means that we direct more of an investor’s money towards green projects that have been independently verified,” said Howie Li, Head of ETFs at LGIM.
Manulife Investment Management has launched its Manulife Global Fund (MGF) Sustainable Asia Bond Fund in Europe. The fund will take advantage of growing global trends in sustainable and responsible investing and invest in Asian fixed income securities with strong sustainability attributes. The fund will be managed by Murray Collis, Deputy CIO of Fixed Income, Asia ex-Japan, at Manulife IM. “Sustainable and responsible investing is fast becoming one of the most important investment criteria globally, and as one of the largest fixed income houses in Asia, and a global leader in ESG integration, we believe we’re well-positioned to capture the growth potential of both Asia and ESG and deliver it to our clients,” said Endre Pedersen, Deputy CIO of Global Fixed Income and CIO of Fixed Income, Asia ex-Japan, at Manulife IM.
Scottish Widows’ Master Trust has expanded its offering with four additional ESG funds. The SW BlackRock Climate Transition World Equity Global Equity, SW Liontrust Sustainable Future Managed Multi-Asset, SW Baillie Gifford Positive Change Global Equity and SW Robeco Global Credits Global Fixed Interest funds span across asset classes. “There’s a growing desire among pension scheme members for their retirement savings to be invested responsibly on their behalf. In response, we have embedded responsible investment principles into our default investment strategy. Now we are going further by creating the opportunity for our members to express their preference for responsible investing via our self-select range. Responsible investing is at the heart of the Trustees’ commitment to helping our members to achieve good retirement outcomes and value for money,” said Andrew Warwick-Thompson, Chair of the Scottish Widows Master Trust.
Border to Coast Pensions Partnership, one of the largest public sector pension pools in the UK, has committed over £370m in five new private equity funds. The KKR Asian Fund IV, Thoma Bravo Fund XIV, Nordic Capital Fund X, AlpInvest Co-Investment Fund VIII and Endless Fund V will provide exposure to a number of Border to Coast’s targeted sustainable themes, such as healthcare, technology and operational value add. “Private equity is an important asset class for our partner funds, providing a differentiated risk and return profile relative to public equity markets. With our experienced in-house team, we have been able to generate meaningful fee savings for our partner funds while accessing high-quality investment opportunities with capacity constrained managers,” said Mark Lyon, Head of Internal Management at Border to Coast.
India’s UltraTech Cement (UTCL) has launched its first USD-denominated Rule 144A/Reg S sustainability-linked bonds from South Asia and South East Asia. The cement company was advised by law firm Allen & Overy; the law firm has previously advised the Government of the Hong Kong Special Administrative Region of the People’s Republic of China on its recent green bond issuance. This follows UTCL’s pledge to reduce its greenhouse gas emissions from 2017 levels by 22.7% by May 31 2030. Proceeds from the bonds will be used to refinance INR-denominated debt, general corporate purposes and capital expenditure. “This landmark issuance comes amidst the increasing demand for ESG and sustainability-linked bonds and demonstrated UTCL’s commitment to sound environmental management of its business activities,” said Pallavi Gopinath Aney, Partner of the International Capital Markets team at Allen & Overy.