The asset manager has created a high yield fund that qualifies for the EU’s Article 9 label, with the aim to provide a more sustainable investment option for pension funds and insurance companies.
Dutch asset manager Robeco has launched a Climate Global High Yield Bonds Fund, which aims to make investments that will lower carbon footprints, while still generating a high yield.
Robeco said the fund’s design made it particularly suitable for the strategic asset allocation of pension funds, and insurance companies, in addition to retail investors.
The strategy will be measured against Solactive’s Global High Yield Corporate PAB Select Index, which offers exposure to the performance of global high yield corporate bonds while following carbon reduction criteria of the EU’S Paris-aligned benchmark (PAB) regulation.
Robeco said the fund builds on its track record as a fixed income manager within high yield and climate related strategies, such as climate credits and climate global bonds, and was the first of its type.
“We have seen the introduction of regional PAB funds. However, we now offer a global high yield fund with similar characteristics as a broader high yield market benchmark in terms of yield, duration and rating, offering a broader range of investment opportunities and decisions while complying with the Paris alignment requirements,” Christiaan Lever, portfolio manager, high yield, at Robeco told Impact Investor.
Sander Bus, Robeco’s manager, high yield, said the offering was part of the asset manager’s effort to provide solutions for clients, wherever they were on their sustainability journey.
“This new strategy offers access to the high yield market with a significantly lower carbon impact than traditional high yield products. Our quality-tilted investment approach coupled with climate-focused considerations make our Climate Global High Yield Bonds a unique and impactful choice,” he said.
High yield strategies usually have a higher carbon footprint compared to investment grade bonds due to their composition. However, Robeco’s strategy qualifies for an Article 9 classification, the greenest under the European Union’s Sustainable Finance Disclosure Regulation (SFDR).
The strategy would contribute to an annual 7% reduction in overall emission intensity in its portfolio, and would have a 50% lower carbon intensity than the current investment universe, according to Robeco. It excludes fossil fuel and related activities.
The fund had so far raised €125m seeding customers and expects more asset raising in coming years.
This is the latest in a diverse range of novel sustainable investment products from the Rotterdam-based manager launched in recent years. Last year, it launched another Article 9 fund investing in in companies taking measures to reduce biodiversity loss.
Robeco said it had a total €179bn in assets under management at end-March 2023, of which €176bn was committed to ESG integration