Green Bonds
Key points:
- Targeted impact investing that benefits the environment
- Proprietary green bonds framework to determine portfolio eligibility
- Combines our capabilities in global fixed income and sustainable investing
Philosophy
The strategy aims to create positive environmental impact, whilst generating outperformance relative to its underlying benchmark, the Bloomberg Barclays MSCI Global Green Bond Index, over the long run.
The underlying investment philosophy is based on the segmentation of fixed income markets and how they are not perfectly synchronous. Fear and greed cycles overshoot, creating dislocations in valuation and risk premiums. We believe that we can discover and exploit these market inefficiencies.
Process
The strategy uses a proprietary five-step bond selection framework to determine the eligibility of green bonds and to ensure that these are in line with the most recent regulatory developments on sustainable finance. It is designed to ensure that only those green bonds that adhere to internationally accepted principles for green bonds, and which truly have an impact, are eligible for the portfolio.
Once the universe of eligible green bonds is determined, a fundamental analysis is applied, relying on the disciplined and repeatable investment process used by the Robeco Fixed Income team.
The Green bonds strategy is actively managed with a diversified exposure to the global green bond market. It exploits both active interest rate and credit strategies by investing in green bonds issued by governments, government-related agencies and corporates.
Green bond issuance has developed healthy momentum over recent years.
Team
The strategy is managed by a team of global fixed income and sustainability specialists that has experience in the green bond market since 2013.
