Fund Solutions

This Week’s Fund News: Mirabaud, AllianceBernstein Offer Green Bond Exposures

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Mirabaud AM, Axiom, AllianceBernstein, BNPP AM, Ethos Invest, MSIM, JPM AM and Janus Henderson. 

New funds launched this week aim to tap rising demand for sustainability-linked and green bonds. Mirabaud Asset Management has strengthened its responsible and sustainable investment focus with the launch of the Mirabaud Global Climate Bond fund. Benchmarked against the Barclays Global Aggregate Bond index, the strategy will target global issuers that have strong commitments to carbon emissions reductions and neutrality over time, investing in green bonds issued explicitly for climate-related and low-carbon investments. With a bottom-up thematic approach, the fund is adopting a hybrid strategy that will also invest in opportunities presented by corporate issuers proving to have sustainability on the agenda that are in line with Paris Climate Agreement targets.  AllianceBernstein has broadened its sustainable fund range with the Sustainable Income Portfolio. Aligning with the United Nations Sustainable Development Goals, it has been labelled as an Article 9 product under the EU’s Sustainable Finance Disclosure Regulation. It will invest in 125/250 developed and emerging market issuers of green, social and sustainability-linked bonds. “We think of this strategy as a way for investors to future-proof their investments, and to thematically participate in some of the biggest trends and secular shifts in society and the global economy over the coming years. These are not just investments that ‘do good’ – they are also products and services which are set to rise in global demand, underpinning the businesses of those companies whose bonds we invest in,” said Tiffanie Wong, Co-Portfolio Manager of the Sustainable Income Portfolio for AllianceBernstein. French asset manager Axiom’s Sustainable Financial Bonds fund has been awarded the ‘Towards Sustainability’ label from the Belgian Financial Sector Federation. The fund invests in financial institutions that are considered best in class for climate change integration. Using Axiom’s Climate Readiness Score methodology, the firm uses both qualitative and quantitative data analysis to identify climate leaders within the European financial sector.

BNP Paribas Asset Management (BNPP AM) has launched the BNP Paribas Ecosystem Restoration, a thematic fund which offers exposure to companies engaged in restoring and preserving global ecosystems and natural capital. Consisting of up to 60 holdings selected across 1,000 global companies focused on aquatic, terrestrial and urban ecosystem restoration, the fund will implement quantitative screening of ESG criteria to identify the best-in-class. The fund also contributes to six of the United Nations Sustainable Development Goals. “Half the world’s GDP is dependent on natural capital and our consumption of it is taking place 1.75 times as fast as the earth can regenerate it, while global population growth and rising incomes are leading to increased demand, which adds up to an urgent need to restore damaged ecosystems.  The financial sector has a critical role to play in creating a positive environmental impact,” said Edward Lees, Co-Manager of the fund.

UK-based Ethos Invest has launched an ethical, sharia-compliant fund focusing on financial services and technology. Working with AI Inma Investment Company, BMO Global Asset Management’s private equity team and Vistra (the fund’s administrator), the Financial Services & Technologies Fund is expected to be the largest of its kind. It has a fundraising target of £1 billion for private equity investments in sharia-compliant and ethical SMEs. While investing in emerging innovators in financial services, such as asset management and banking, the fund will also invest in innovative technologies like blockchain, AI and cyber security. “This fund represents a real milestone for Islamic and ethical finance in the UK and around the world. SMEs with strong ethical credentials are vital as we look towards a brighter future for the global economy and ensuring that these companies have access to capital is key,” said Dr Quintan Wiktorowicz, partner at Ethos Invest.

JP Morgan Asset Management (JPM AM) has expanded its sustainable OEIC offering with three new funds. This includes the firm’s first thematic offering, the JPM Climate Change Solutions fund, which will invest in forward-thinking companies developing and scaling solutions to address climate change, such as clean energy or less carbon-intensive forms of agriculture. “The Climate Change Solutions fund is designed to help investors intelligently capture innovative investment opportunities and technologies facilitating the low carbon transition,” said Dale Erdei, Head of UK Funds at JPM AM. Alongside the Climate Change Solutions fund, JPM AM has also launched the JPM UK Sustainable Equity fund (OEIC) and the JPM Global Sustainable Equity fund (OEIC). Both funds will exclude unsustainable sectors and, in partnership with JPM AM’s sustainable investing team, the portfolio managers will engage with companies on ESG-related material issues.

Morgan Stanley Investment Management (MSIM) has launched the UK OEIC Global Insight fund. Managed by MSIM’s Counterpoint Global, the fund will operate as a high-conviction, concentrated portfolio investing in established and emerging sustainable companies. This follows the launch of MSIM’s US Advantage OEIC in 2016. “Our goal is to generate long-term capital growth through our investments in unique and established high quality companies with sustainable advantages and whose market value have the potential to increase significantly over time due to their strong underlying fundamentals,” said Dennis Lynch, Head of Counterpoint Global at MSIM.

Janus Henderson has filed a preliminary registration statement with the US Securities and Exchange Commission (SEC) for five sustainable ETFs. Two are fixed income ETFs and three are equity-based: US Sustainable Equity ETF (SSPX), International Sustainable Equity ETF (SXUS), Net Zero Transition Resources ETF (JZRO), Sustainable Corporate Bond ETF (SCRD), and Impact Bond ETF (JIB). The funds will be managed by four investment teams across three continents and, if approvals are granted, can be expected to launch around 9 September, 2021. “These new ETFs will allow us to build on a strong tradition of sustainable investing and meet the growing demand for ESG investing opportunities,” said Janus Henderson CEO Dick Weil.

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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