Fund Solutions

This Week’s Fund News: Invesco Launches Duo of ESG Bond ETFs

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Invesco, VanEck, ORRAA, Octopus Energy, and Victory Hill.

US-headquartered asset manager Invesco has announced the launch of two corporate bond ESG ETFs, the Invesco EUR Corporate Bond ESG Multi-Factor UCITS ETF and Invesco EUR Corporate Bond ESG Short Duration Multi-Factor UCITS ETF. The funds aim to overcome traditional yield shortfall by using multi-factor investing, offering exposures either across the full maturity spectrum or focusing only on short duration, which the ETF defines as bonds with no more than five years to mature. The funds’ ESG policy incorporates exclusionary criteria and a best-in-class approach. A quantitative investment process is then applied to the remaining eligible securities to calculate the degree of attractiveness of investing according to value, low volatility and carry. Paul Syms, Invesco’s Head of EMEA Fixed Income ETF Product Management, said: “Our newest ETFs allow investors to position their portfolio to reflect their own economic views, either investing across the full maturity curve if they believe yields are close to peaking or focusing on short maturity if they are concerned interest rates could rise further than is currently being priced into the market.” 

New York-based global asset manager VanEck has launched a new sustainable food production and development passive fund. Categorised as an Article 9 fund under the EU’s Sustainable Finance Disclosure Regulation (SFDR), the VanEck Sustainable Future of Food UCITS ETF closely tracks the performance of the MVIS Global Future of Food ESG Index, which adheres to ESG criteria and is set up as a pure-play product. Only companies that generate at least 50% (25% for current components) of their revenues in the food sector or innovative agricultural technologies are included, as well as companies that produce organic food and those that have high standards relating to food waste, food safety or environmental impact. In its individual stock selection for the ETF, VanEck will focus on food technology, agricultural sustainability and precision agriculture. Martijn Rozemuller, VanEck Europe’s CEO, said: “Without profound changes in agriculture and food production, the world will not be able to stop climate change. With all this in mind, consumers around the world are now demanding alternatives.” 

The Ocean Risk and Resilience Action Alliance (ORRAA) is spearheading a US$1 billion investment into coastal and ocean ecosystems by 2030. The Sea Change Impact Financing Facility (SCIFF) was launched at the One Ocean Summit in France in February and has since attracted high-profile support from financial and insurance institutions at this week’s UN Ocean Conference in Lisbon. The SCIFF aims to generate at least US$1 billion of investment into coastal and ocean ecosystems and provide a springboard for the mobilisation of at least US$2.5 billion of broader finance into the space. It is composed of three core integrated components: Blue Resilience Clearing House, Finance Umbrella, and Risk Transfer Platform. The financing facility, which is supported by BNP Paribas, AXA and Deutsche Bank, uses a systematic approach to build this new financing architecture, creating an investment ecosystem for sustainable initiatives developed at scale and speed. Karen Sack, ORRAA’s Executive Director, said: “The creation of this new ecosystem, together with ORRAA’s investments into scalable projects with the prospect of bankable returns, will enable the deployment of billions of dollars into nature-positive coastal and ocean resilience over the next decade.”  

British renewable energy group Octopus Energy has announced it has acquired two wind turbines in the Netherlands, accelerating its European expansion. Following its entry in the German wind energy market, the company’s second offshore wind investment this year sees Dutch acquisitions including two 9.5-megawatt (MW) wind turbines. The 19 MW Borssele V wind farm operated by Eneco includes the largest turbines in Octopus’ portfolio, creating energy to power 25,000 homes a year and offsetting 16,000 tonnes of carbon emissions. Zoisa North-Bond, Octopus Energy Generation’s CEO, said: “The Netherlands is on the path out of fossil fuels and we’re here to help on this mission. We started making a splash in offshore wind this year, and we’ve already got a lot more in the pipeline.” Octopus currently manages 3 GW of renewable energy assets across Europe and aims to create 18 GW of green energy generation projects globally by 2027.  

Victory Hill Global Sustainable Energy Opportunities (VH GSEO), a UK-based capital market company, has announced it has successfully fundraised £122 million to invest in sustainable energy infrastructure investments. These investments have either secured, have non-binding offers placed for, or are in advanced negotiations with VH GSEO by Victory Hill Capital Advisor. Bernard Bulkin, VH GSEO’s Chair, said: “Since IPO in February 2021, we have successfully committed or deployed c.£290 million across an attractive portfolio of 24 assets diversified by both technology and geography. This further capital commitment of £122 million, from both new and existing shareholders, will support our future growth ambitions and takes our total capital raised to over £455 million in less than 18 months.” 

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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