Fund Solutions

This Week’s Fund News: AXA IM Bond Fund Targets “Social Dimension”

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including AXA IM, Neuberger Berman, BlackRock, Man GLG and Hy2gen AG.

AXA Investment Managers (IM) has launched the AXA World Funds – Act Social Bonds fund to help support the transition to a more sustainable economy while ensuring measurable social benefits. Tracking a number of the UN’s Sustainable Development Goals (SDGs), the fund will prioritise themes such as access to education, employment preservation and creation, promotion of basic needs like clean water and energy, and access to healthcare services. The fund will invest at least 75% in social and sustainability bonds and 25% in conventional bonds aligned with a positive social impact, ensuring a diversified universe and strong liquidity. It is classified as an Article 9 product under the EU’s Sustainable Finance Disclosure Regulation (SFDR). “In the transition to a low carbon economy, we cannot ignore the social dimension,” said Johann Plé, manager of the fund. “While most impact investment strategies currently focus on the environment and decarbonisation, we believe the tremendous growth observed in the social and sustainability bond market in recent years is an opportunity to build a dedicated social bond strategy and we are proud to launch our first bond fund invested in this space.”

Employee-owned investment management firm Neuberger Berman is expanding its emerging market debt offering with its new UCITS Neuberger Berman Sustainable Asia High Yield fund. The Dublin-domiciled fund is benchmarked against the JP Morgan JESG JACI High Yield index, investing in high-yielding Asian credit opportunities with strong sustainability profiles. Aiming for a 30% lower carbon intensity than the index, the fund will consider businesses leveraging technology offering solutions for a low-carbon future. Engagement efforts will be focused on the UN SDGs and Guiding Principles for Business and Human Rights. “In order to significantly reduce carbon emissions globally, targeted investment across Asia will be necessary to ensure substantial progress is made,” said Jose Cosio, Head of Intermediary, Global ex US, at Neuberger Berman. “This requires a more active, engaged, and forward-looking approach to achieve genuine sustainable investing, whilst meeting the needs of the region.”

BlackRock, the world’s largest asset manager, has launched a new range of ESG equity index funds for the UK’s wealth market. Comprising for five funds covering regional and country-specific equity exposures, the new range aims to maximise ESG characteristics and reduce carbon emissions intensity by at least 30% compared to the parent Morningstar benchmarks. “These new sustainable core index building blocks allow investors to build low-cost, global equity portfolios with the flexibility to adjust exposures according to their asset allocation needs,” said Manuela Sperandeo, BlackRock’s EMEA Head of Sustainable Indexing. Each index has been designed to maintain a target tracking error for each geography and will implement the Morningstar ESG Enhanced Index methodology which applies a set of ten exclusionary screens to limit each fund’s exposure to controversial activities. “Our suite of ESG indexes draw on the capabilities of the Morningstar Indexes’ global research team in addition to the underlying ESG ratings of Sustainalytics, also part of Morningstar,” said Rob Edwards, Director of Product Management, EMEA and ESG, at Morningstar Indexes.

Man GLG, the discretionary investment management arm of Man Group, has launched the Man GLG Global Investment Grade Opportunities fund. Classified as Article 8 under the EU’s SFDR, the actively managed credit strategy integrates ESG through the Man Group responsible investment framework. Benchmarked against the ICE BofA Global Large Cap Corporate index, it will invest at least 80% of its net asset value in a portfolio of global investment grade bonds from small to medium-sized issuers globally. “We have launched this fund in response to demand we are seeing from clients for innovative approaches to global credit investing, and in recognition of the important role that fixed income allocations continue to play in investor portfolios,” said Teun Johnson, CEO of Man GLG. It is the second Man GLG fund to be managed by Jonathan Golan, who joined the firm in July 2021, following the launch of the UK-focused Man GLG Sterling Corporate Bond fund in September 2021.

Hy2gen, a green hydrogen investment platform, has completed its latest investment round, raising €200 million. The capital will be used for the construction of facilities producing green hydrogen-based fuels for maritime and ground transport, aviation and industrial applications. Fundraising was led by clean hydrogen infrastructure platform Hy24, alongside Mirova, CDPQ and Technip Energies. “We are convinced that green hydrogen has a key role to play in the decarbonisation of the industry and are proud to partner with Hy2gen and support their ambition to become a key player in the deployment of this energy of the future,” said Raphaël Lance, Head of Mirova’s Energy Transition Infrastructure funds. Hy24 runs the Clean H2 Infra fund, which has so far raised €1 billion to unlock strategic and large-scale projects to accelerate the upscaling of hydrogen markets. “The magic combination for success in hydrogen scale up is sizable projects in strategic basins, strong stakeholder support from off-take to project financing and execution, and the leadership of expert teams for development and steering,” said Pierre-Etienne Franc, Hy24 CEO. “This is what Hy2gen has successfully gathered around the table. This first investment made by our Clean H2 fund allows Hy24 to step into its role as a catalyst for hydrogen-based projects at scale to foster the energy transition.”

 

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