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Robeco launches multi-factor ESG fixed income strategy

Green_bondsRobeco has launched a fund that will invest in a mix of credits and government bonds whilst integrating environmental, social and governance (ESG) criteria into the investment process.

The fund will be managed by Olaf Penninga and Patrick Houweling, who heads the Dutch firm’s quant credit capability.

As part of its ESG integration, engagement and exclusions will be carried out by Robeco’s active ownership team.

Penninga said: “Academic and empirical evidence has shown that bond portfolios with significant exposure to the low risk, quality, value, momentum and size factors can generate consistently higher returns than the index.”

Domiciled in Luxembourg, the Robeco QI Global Multi-Factor Bonds aims to outperform the Bloomberg Barclays Global Aggregate Index while providing investors with a balanced exposure to “low risk, quality, value, momentum and size” factors.

Robeco said the strategy is one of the first factor investing solutions for the broad global fixed income market.

According to Penninga, the strategy builds on decades of research into factors in fixed income, whilst leveraging the firm’s expertise in the field of factor investing in credits and government bonds.

The strategy is available to both institutional and retail investors.

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