Nordea Asset Management (NAM) has expanded its ESG fixed income offering with the launch of the Nordea 1 – Emerging Stars Bond Fund.
Building on the success of NAM’s Stars fund range in the equities space, the asset manager has added a second fixed income solution, the Nordea 1 – Emerging Stars Bond Fund. It follows the recent launch of the 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 among EM investors that ESG issues can present material credit risk in respect to sovereign debt. NAM’s new solution offers investors a unique opportunity to invest in EM debt with ESG integration.
“Given the increasing economic importance of emerging markets, EM debt is likely to continue delivering attractive risk-adjusted returns in the medium to long term,” says Thede Rüst (pictured), Head of Nordea’s EM Debt Team and manager of the fund. “In addition to the solid risk/return profile and attractive valuations of EM debt, the fund benefits from a proprietary ESG model that goes beyond simply adhering to an exclusion list.”
Members of the portfolio management team participate in international working groups and collaborative forums in order to engage with sovereigns and help them define ESG issues in the EM sovereign space. The team also collaborates closely with NAM’s award-winning Responsible Investment Team.
“In the same way that ESG risk is an important factor in EM equities, it can be particularly material in the EM debt environment,” says Marjo Koivisto, co-Head of Responsible Investments at NAM. “This fund is designed to beat the benchmark and deliver long-term sustainable returns and responsibility by offering a materially improved ESG profile compared to the general market.”