BlueBay launches ESG-focused multi-asset credit fund
BlueBay Asset Management has launched a new ESG-focused multi-asset credit fund, categorised under Article 8 of the Sustainable Finance Disclosure Regulation (SFDR).
The BlueBay Total Return Diversified Credit ESG fund will invest in global high yield bonds, bank loans, financial capital bonds, structured credit and convertible bonds, across emerging and developed markets.
It will be managed by BlueBay's head of multi-asset credit Raphael Robelin and senior portfolio manager Blair Reid, who will be supported by portfolio manager Maria Satizabal.
BlueBay said the fund will avoid companies with revenue derived from oil sands and arctic drilling, as well as limiting exposure to companies deriving revenues from thermal coal or fossil fuel exploration and production. It will also exclude sovereigns that have not ratified the Paris Climate Agreement.
In addition, controversial weapons and tobacco will not be included in the fund.
UK equity funds outperforming in ESG scores
The fund will use BlueBay's proprietary ESG research to identify and avoid investments with excessive ESG risks, adding to BlueBay's other ESG funds such as the Impact-Aligned Bond, Investment Grade ESG Bond and Absolute Return ESG Bond funds, which were all launched earlier this year.
Lloyd's of London is one of the fund's first investors, and investment manager Steven Koeman said: "This is a further step for Lloyd's in integrating ESG factors across all our investments as part of our wider sustainability ambitions."
BlueBay's Blair Reid added: "Investors want more ESG without sacrificing returns. Our innovative approach is to target a similar yield to our standard MAC strategy by adjusting the credit risk within our MAC ESG strategy (BB on average for MAC ESG, versus BB+ for standard MAC).
"We are excited to be launching this latest iteration of our multi-asset credit offering. It feels an understatement to say that investors are increasingly focused on the impact their money is having on the world from an ESG perspective, so for us, this fund is a natural next step in the evolution of our product suite."
