Invesco announces the launch of the Invesco Environmental Climate Opportunities Bond Fund (UK), referred to as ECO Bond, which offers investors the opportunity to invest for income and growth in a way that supports the transition to a low-carbon global economy.
The Invesco ECO Bond Fund will combine traditional credit research with corporate climate analysis to invest in a diversified portfolio of bonds issued by companies with strong climate characteristics. It will target predominantly corporate issuers in the investment grade, high yield and emerging markets sectors, but also includes government bonds for risk management and liquidity purposes.
The Fund will take a multi-pronged and pragmatic approach to climate investing, investing in issuers with low emissions; those with high emissions that have significant potential to reduce their carbon output; green, transition and sustainability-linked bonds that aim to raise funds for climate-friendly projects; and companies that have made commitments to net zero carbon emissions.
The Fund is managed by Michael Matthews, Co-Head of the Henley Fixed Interest team, and Tom Hemmant, fixed income fund manager. The Fund benefits from the Invesco Henley Fixed Interest team’s rich heritage; the team is responsible for £25bn AUM and has a 26-year track record* of managing corporate bond funds.
The Fund’s managers will also draw on the climate expertise of Invesco’s rapidly growing ESG team, which has added eight new members in the past year and is led by Cathrine de Coninck-Lopez. Invesco’s bespoke ‘Climate Comparator’, which measures a wide range of climate indicators such as CO2 data and third-party assessments, will help identify investment opportunities among businesses performing well compared to others in their sector when it comes to climate change. The Fund will exclude businesses that derive a specified proportion of their revenues from non-sustainable sources, like companies where thermal coal extraction generates more than five percent of revenue.
Michael Matthews, Co-Head of the Henley Fixed Interest team, said: “To meet the commitments outlined in the 2015 Paris Agreement the world will have to undergo a rapid decarbonisation of economic and social activity on an unprecedented scale. The financing requirements are enormous and the level of support needed to improve clean energy and energy efficiency presents a huge opportunity for investors. Our blended approach to climate investing seeks to capitalise on this opportunity by focusing on issuers with strong climate characteristics and an attractive potential return profile.”
Alexander Millar, Head of UK Distribution at Invesco, said: “The ECO Bond Fund is a response to substantial client demand for a strategy which leverages the vast expertise of our 24-strong Henley Fixed Interest team in combination with our considerable ESG capabilities to invest for income and growth in a way that supports decarbonisation. It will enable investors to benefit from and support climate positive companies tackling climate change, and adds to the breadth and depth of sustainable investment solutions we offer across all asset classes.”