Building on the success of Nordea Asset Management’s (NAM) ‘Stars’ fund range in the equities space, the asset manager is expanding into fixed income with the new Nordea 1 – European Corporate Stars Bond Fund.
Fixed income funds with true ESG implementation represent a relatively new approach to responsible investment. The market is beginning to take notice – with growing recognition ESG issues can present material credit risk with respect to corporate debt.
“We exploit market inefficiencies by focusing on company specific research and ESG criteria to identify long-term changes critical to credit quality,” says Jan Sorensen, lead portfolio manager of the fund.
While the Nordea 1 – European Corporate Stars Bond Fund benefits from Nordea Credit Team’s bottom-up credit selection in investment grade corporates, active management is taken one step further with true ESG integration. Recognising corporate governance and ESG factors as a source of both risk and opportunity, the investment team collaborates closely with Nordea’s in-house Responsible Investment Team. The Stars concept utilises a proprietary ESG rating model and funds invest only in companies that live up to NAM’s ESG standards.
“We draw on Nordea’s vast organisational experience in ESG and our proven track record with the Stars equity strategies to apply our Stars concept to fixed income solutions,” says Marjo Koivisto, co-head of responsible investment at NAM. “Emphasising ESG factors can help deliver better risk adjusted returns.”