Swiss asset manager Bantleon has delved further into the world of sustainable investing with the launch of a global green bond fund.
The Luxembourg-domiciled fund, which is called Bantleon Select Green Bonds, will invest primarily in global green bonds with an investment-grade rating. This is while around 25% of the fund can be invested in high-yield debt.
It will primarily focus on euro-denominated bonds but it may include other currencies from developed markets. The currency would then be almost completely hedged to remove foreign currency risk.
Stephan Kuhnke, head of portfolio management at Bantleon, said: ‘The focus on a global universe offers not only higher return opportunities but also better diversification potential and higher liquidity than with purely European portfolios.’
Bantleon said the fund’s overall investment objective is to achieve an outperformance compared to the global green bond market without increasing volatility. It also aims to ensure ESG ratings and standards are targeted that exceed those of the benchmark.
It will be adopting its own systematic, multi-stage analysis to verify issuers, which uses five core pillars: greenwashing; emission/issuer analysis; use of funds and administration; reporting; second opinion; and verification.
The analysis also focuses in particular on the use of funds, while leveraging the second opinion of independent analysis companies to further dispel greenwashing concerns.
It will first analyse green bonds on the basis of exclusion criteria, which are regularly monitored independently of each other and which, if they emerge, lead to the immediate exclusion of the presumed green bond.
If there are no exclusion criteria, the bonds are scored in a second step. Regarding the use of funds, the focus here is particularly on compatibility with the UN sustainability goals, as green bonds may have a significant influence on the achievement of 12 of the 17 sustainability goals.
Individual bonds are selected on a bottom-up basis, while also using relative value analysis. The fund management team will focus on the economic cycle when managing the performance sources of duration, yield curve, spreads and sector allocation.
Source: CityWire Selector