Axa Investment Managers has launched its first low-carbon fund targeting US high yield and integrating ESG (environmental, social, and governance) criteria.
The fund will exclude many of the most carbon intensive sectors such as metals, mining, steel producers, and utilities, the fund manager said. Most sub-sectors within energy will also be left out the portfolio.
Within the remaining investible universe, carbon intensity and water intensity scores of bond issuers will be analysed to avoid companies deemed as unsustainable.
According to Axa IM, this will further contribute to the fund’s carbon and water intensity target of at least 20% lower than the benchmark.
Forming part of the firm’s sustainable investing offering, the Axa WF US High Yield Low Carbon Bonds Fund will also be classified as article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR), which came into force on March 10.
The fund is managed by Carl ‘Pepper’ Whitbeck, who stated that the global economy has entered a ‘decade of transition’ towards a more sustainable, de-carbonised model.
“During this transition, we believe portfolios aiming to proactively reduce carbon intensity should be better positioned to withstand non-financial risks and outperform the broad market,” he said.
“Carbon and water intensity are two widely followed ESG key performance indicators and among the most important metrics to look at when analysing the environmental impact of companies in the US high yield space,” Whitbeck added.
The low carbon US high yield fund is available to professional and retail investors across Europe.
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