EdenTree Investment Management has expanded its fixed income fund suite with the launch of the EdenTree Global Select Government Bond Fund, a global portfolio of government and government-related ESG-labelled bonds.
The fund is managed by EdenTree’s Head of Fixed Income, David Katimbo-Mugwanya. It targets at least 80% asset exposure to government and government-related green, social, sustainable or impact bonds, the proceeds of which finance new or existing projects that support a reduction in carbon emissions caused by human activities and/or enable greater access to services that empower communities around the world.
From a global sovereign debt universe, the responsibility of governments and government-related entities is assessed through EdenTree’s proprietary Oppressive Regime screen*.
EdenTree said the fund has been tailor-made to meet client demand and is “firmly underpinned” the specialist last manager’s “signature meticulous selection of rigorously screened issuers and securities”. The fund also aims to provide a regular income, payable quarterly, in a manner consistent with its sustainability approach.
Commenting on the launch, Katimbo-Mugwanya said: “In its latest assessment of development investment around the world, the United Nations (UN) estimates that $4.2 trillion per annum is required to close the development financing gap, up from $2.5 trillion before the COVID-19 pandemic. Urgent steps are needed to address global sustainable development funding requirements, and governments have a unique ability to mobilise capital at scale through vast debt issuance programmes, placing them in a prime position to fund projects that tackle these societal challenges.
“Sovereign ESG-labelled debt issuance is continuing at an unprecedented pace, with government and or related issuance making up just over half of the outstanding global universe of use-of-proceeds green, social and sustainable debt. In a market environment that offers considerably higher bond yields compared to the last decade, the risk-return profile of government debt from an asset allocation perspective has markedly improved. As such, we believe this new fund is ideally placed to leverage these market dynamics in the best interests of clients seeking to credibly enhance sustainable fixed income offerings when allocating to government debt.”
The fund will be part of EdenTree’s fixed income fund range, including the Edentree Responsible & Sustainable Short Dated, Responsible & Sustainable Sterling Bond and Global Impact Bond strategies.
James Tomlinson, Head of Wholesale Distribution, EdenTree, added: “The EdenTree Global Select Government Bond Fund has been developed in close partnership with an existing client to meet a specific strategic requirement for a sustainable government bond solution.
“Fixed Income is playing an increasingly important role for investors seeking to link financial goals with the desire to address pressing societal needs and environmental concerns. While equities have traditionally dominated the options available for responsible investors, fixed income now provides innovative sustainable investment products with varying risk profiles, degrees of impact and competitive rates of return. With this in mind, we are delighted to further enhance our fixed income offering, providing our clients with greater flexibility and increased choice when it comes to meeting their investment and sustainability goals.”
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