Calvert has launched the Calvert Unconstrained Bond Fund (CUBAX), the only mutual fund in the non-traditional bond category to feature the incorporation of environmental, social and governance (ESG) analysis in its investment process.
Unconstrained funds are not typically managed against a benchmark index, but rather re-allocate to be best positioned in changing markets.
“The Morningstar Nontraditional Bond category has been averaging USD2.9 billion in net new flows monthly,” says Cathy Roy, Calvert’s chief investment officer of fixed income and co-portfolio manager of the Calvert Unconstrained Bond Fund. “The fund is flexible and designed to provide positive returns over a full market cycle.”
The fund can adapt to changing market environments through yield curve positioning, duration management, liquidity management, sector positioning and security selection.
"Our top-down macroeconomic analysis combined with rigorous bottom-up security selection helps us identify sectors and issuers with the best risk-adjusted return potential,” says Vishal Khanduja, co-portfolio manager.
The credit team collaborates with in-house sustainability research analysts to find opportunities in industries and companies that exhibit a combination of particularly strong fundamentals and favourable ESG factors. They avoid exposure in areas of the credit market where the reverse may apply.