Fund Solutions

This Week’s Fund News: BNPP AM Broadens Range with Social Bond Fund

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including BNPP AM, BlueBay AM, Credit Suisse, JPM AM, AXA IM, UOBAM, SGX and Borderless Capital.

In line with its global sustainability strategy, BNP Paribas Asset Management (BNPP AM) has launched the BNP Paribas Social Bond fund, capitalising on the fastest growing segment of the sustainable bond universe. Investing in bonds aimed at financing projects with positive social impacts, the fund is classified as Article 9 under SFDR. The bond will invest in three main areas: minimum of 75% in bonds labelled social or sustainable; maximum of 25% in bonds issued by socially responsible companies; and maximum 10% in microcredit instruments helping provide small businesses and individuals in emerging markets with access to financial services. “The growing importance of bonds within thematic management, historically more geared towards equities, and the emergence of social considerations among investors are two major developments in our industry. The launch of BNP Paribas Social Bond fund enables capital to be directed towards activities with a positive social impact, such as unemployment benefit programmes or social housing. Our rigorous methodology brings real added value, by evaluating not only the quality of the issuer but also that of the projects being financed,” said Arnaud-Guilhem Lamy, Head of Euro Aggregate Bond Strategies at BNPP AM.

BlueBay Asset Management has launched the BlueBay Total Return Diversified Credit ESG Fund. It aims to give investors exposure to a firm’s ‘best ideas’ through an ESG lens, covering bank loans, structured credit, convertible and financial capital bonds, and global high yield. Categorised as Article 8 under SFDR, the fund will avoid investments with excessive ESG risks, such as thermal coal and arctic drilling. “Investors want more ESG without sacrificing returns. [They] are increasingly focused on the impact their money is having on the world from an ESG perspective, so for us, this fund is a natural next step in the evolution of our product suite,” said Blair Reid, Co-Portfolio Manager of the fund.

Credit Suisse has partnered with JP Morgan Asset Management (JP MAM) to launch the Credit Suisse JPMorgan Sustainable Nutrition Fund. Launching with US$250 million in assets under management, the fund will invest in companies focused on making food systems less carbon-intensive, addressing the connections between nutrition, health, biodiversity and climate. “As we transition towards a more sustainable global economy, a focus on sustainable nutrition should sit at the heart of this transition. This new strategy seeks to make a positive contribution to a healthier future, investing in companies which are seeking to address current inefficiencies in the food value chain by making food systems less carbon intensive and ultimately enabling healthier diets,” said Jennifer Wu, Global Head of Sustainable Investing at JP MAM.

AXA Investment Managers’ flagship European logistics fund, AXA Logistics Europe Master, has successfully priced an €800 million green bond with a Green Notes Framework. The fund provides diversified exposure to a logistics portfolio for institutional investors across Europe, North America and Asia. This is the first bond issued by AXA Logistics Europe, with Green Notes issued across two tranches, including €500 million with a five-year maturity and €300 million with an eight-year maturity. “The shift in financing strategy to unsecured debt will allow the repayment of existing mortgage loans, with the positive change in the long-term capital structure of the Fund allowing for further growth and continued market leading returns,” said Timothé Rauly, Head of Fund Management at AXA IM Alts.

UOB Asset Management (UOBAM) has launched the UOB APAC Green REIT ETF, which aims to meet rising demand in high-yielding real estate investment trusts instruments and sustainable investing. The ETF is listed on the Singapore Exchange (SGX). “Investors want effective price benchmarks, but more importantly, highly liquid and investable instruments that are increasingly tied to standardised and validated ESG data. Together with UOBAM, we have jointly created an index and a yield investment tool that is aligned with positive environmental outcomes,” said Michael Syn, Head of Equities at SGX. The fund is benchmarked against the iEdge-UOB APAC Yield Focus Green REIT Index which comprises of 50 REITs across the APAC region that meet its environmental criteria. “The UOB APAC Green REIT ETF gives investors an opportunity to participate in the development of sustainable real estate taking place across Asia Pacific so they can invest for profit and purpose,” said Thio Boon Kiat, UOBAM CEO.

Miami-based venture capital firm Borderless Capital, has closed the PLANETS.Fund, a US$10 million fund focused on building a green data economy. It will invest in the PlanetWatch ecosystem, a decentralised air quality monitoring network built on the Algorand blockchain. “Air pollution is one of the world’s most serious public health threats, with nine out of ten people worldwide living in places where pollutants exceed the guideline limits of the World Health Organisation. The PLANETS.Fund was established to accelerate the development of responsible air quality monitoring on Algorand, which will help us mitigate the problem with reliable data and at the same time create value for our investors,” said David Garcia, Borderless Capital CEO.

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