Columbia Threadneedle Investments has added a new fund to its sustainable investment proposition targeting European bonds, in partnership with Paris-based global consortium INCO.
The Luxembourg-based European Social Bond fund, which follows the recent launch of UK Social Bond fund in 2013 and the US Social Bond fund in 2015, aims to achieve “a financial and a social return” by investing in corporate bonds across Europe.
The firm claims this fund is the first of its kind in Europe. It will cover social areas such as affordable housing, health, education and employment and will have an evidence-based investment approach, the firm says.
Simon Bond, the director of responsible investment portfolio management, who already manages the UK Social Bond fund, will also run the new product.
Bond says: “We are seeing a growing demand from clients to deploy their savings in a way that can generate social benefits and sustainable positive outcomes. At the same time, we strongly believe that investors need not sacrifice performance to achieve social impact. We have a proven track record of over three years in managing outcomes-focused social bond strategies with strong risk-adjusted returns.
“Out of 4,000 European corporate bonds in the market, we have identified that approximately 45 per cent are social in nature across different sectors and countries. By actively selecting specific bonds with positive social outcomes, rather than excluding bonds through conventional negative screens, we aim to generate positive social and financial results. The portfolio also offers daily liquidity, therefore opening it up to a wide range of investors.”