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Aegon AM shifts €567m bond fund focus to climate transition

Aegon AM shifts €567m bond fund focus to climate transition

Image source: Aegon Asset Management

  • Fund to have at least 30% less carbon intensity than broader credit market
  • Embedded with Aegon’s proprietary climate transition and ESG analysis

Aegon Asset Management has added a climate transition focus to its £490m (€567m) Aegon Short Dated Investment Grade Bond fund.

The fund, now known as the Short Dated Climate Transition fund, is classified as Article 8 under Sustainable Finance Disclosure Regulation.

It will work as a collaboration with Aegon AM’s responsible investment team and global credit research team, which will embed the asset manager’s proprietary climate transition and ESG analysis into the portfolio.

The fund now combines financial and climate considerations with the aim of delivering a return of cash +1.25% gross of fees over rolling three-year periods, while having at least 30% less carbon intensity than the broader credit market, as defined by the BofAML Global Large Cap Corporate 1-to-5-year index.

The fund still targets investment grade bonds with less than four years to maturity, and has a maximum allowable exposure of 20% in callable or high yield bonds.

See related article: Aegon Asset Management closes first deal in ESG-centric venture

Citywire + rated Iain Buckle, head of UK credit at Aegon AM, will continue to run the fund.

Commenting on the change, Buckle said it was appropriate to update the fund’s name to better reflect its evolution to become an Article 8 strategy, and the subsequent changes in investment approach and responsible investing philosophy.

‘Within the fund we have a highly experienced team with a strong track record of managing short-dated investment grade strategies.

‘We also utilise our proprietary climate transition framework and our specialist responsible investment team to research and categorise issuers according to their level of alignment with progress towards a net-zero economy.’

Source: CityWire


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