BNP Paribas Asset Management expands thematic fixed income range with launch of Social Bond fund
BNP Paribas Asset Management (‘BNPP AM’) announces the launch of BNP Paribas Social Bond fund, investing in bonds aimed at financing projects with positive social impacts. The fund is classified as Article 9 under SFDR[1] and launches during a period of record growth for the sustainable bond market, in particular social bonds.
The launch is in line with BNPP AM's Global Sustainability Strategy, of which achieving equality & inclusive growth is one of three priority areas, alongside accelerating the energy transition and protecting the environment. Managed using a rigorous proprietary methodology, bond and issuer selection are aligned with BNPP AM's sustainable investment standards, drawing on the expertise of its bond management teams and its Sustainability Centre. The fund combines BNPP AM’s long-standing expertise in green bonds (BNP Paribas Green Bond fund was launched in 2017) and its in-depth knowledge of social issues, with the BNP Paribas Inclusive Growth fund launched earlier this year.
BNP Paribas Social Bond fund invests in three main areas:
- A minimum of 75% in bonds labelled social or sustainable, promoting access to essential services such as water or health, affordable housing, employment, food security, socioeconomic progress or basic infrastructure.
- A maximum of 25% in bonds issued by socially responsible companies, selected according to a rating model developed by BNPP AM that assigns an ‘inclusion score’ to issuers, ranking them on their social practices aimed at reducing inequalities.
- A maximum of 10% in microcredit instruments that help provide small businesses and individuals in emerging markets with access to financial services.
Social bonds are the fastest growing segment of the sustainable bond universe, accounting for 30% of total Green, Social and Sustainability Bonds in 2020[2]. This growth is expected continue, driven in large part by sovereign or quasi-sovereign issuers and by the expansion of social bond programmes to finance more projects aimed at countering inequalities.
Arnaud-Guilhem Lamy, Head of Euro Aggregate Bond Strategies at BNP Paribas Asset Management and manager of BNP Paribas Social Bond fund, comments:
"The growing importance of bonds within thematic management, historically more geared towards equities, and the emergence of social considerations among investors are two major developments in our industry. The launch of BNP Paribas Social Bond fund reflects both of these, and enables capital to be directed towards activities with a positive social impact, such as unemployment benefit programmes or social housing. Our rigorous methodology brings real added value, by evaluating not only the quality of the issuer but also that of the projects being financed."
Key fund characteristics
Fund name: BNP Paribas Funds Social Bond
Launch date: 23 November 2021
Management company: BNP Paribas Asset Management Luxembourg
Registered for sale in: Belgium, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain, Switzerland
ISIN Codes:
Classic, capitalisation - LU2355551313
Institutional, capitalisation - LU2355551826
Privilege, capitalisation - LU2355551669
Benchmark: Bloomberg Barclays Global Treasury Euro Hedged 3-7 years
Currency: EUR
OCR: 0.68%
SFDR* category: Article 9
SRRI**: 3
* Sustainable Finance Disclosure Regulation. Regulation 2019/2088 of the European Parliament and of the Council of 27 November 2019 on the information to be provided with regard to sustainable development in the financial services sector. Article 9 - product with a sustainable investment objective.
** Synthetic Risk & Return Indicator, measured on a scale of 1 (lowest) to 7 (highest). SRRI is calculated periodically calculation and can therefore change over time. Regular consultation of the fund's KIID is recommended.
- ENDS -
Footnotes
BNP PARIBAS ASSET MANAGEMENT UK Limited, ‘the investment company’, is authorised and regulated by the Financial Conduct Authority. Registered in England No: 02474627, registered office: 5 Aldermanbury Square, London, England, EC2V 7BP, United Kingdom.
This material is produced for information purposes only and does not constitute:
- an offer to buy nor a solicitation to sell, nor shall it form the basis of or be relied upon in connection with any contract or commitment whatsoever or
- investment advice.
This material is issued and has been prepared by the investment company. It contains opinions and statistical data that are considered lawful and correct on the day of their publication according to the economic and financial environment at the time. This document does not constitute investment advice or form part of an offer or invitation to subscribe for or to purchase any financial instrument(s) nor shall it or any part of it form the basis of any contract or commitment whatsoever.
Whilst the fund described herein has been established as a UCITS (in accordance with the UCITS Directive) in Luxembourg, it has not been registered in the UK, therefore the promotion of this fund and the distribution of this document in the UK are accordingly restricted by law.
This document is provided without knowledge of an investors’ situation. Prior to any subscription, investors should verify in which countries the financial instruments referred to in this document refers are registered and authorised for public sale. In particular financial instruments cannot be offered or sold publicly in the United States. Investors considering subscriptions should read carefully the most recent prospectus and Key Investor Information Document (KIID) agreed by the regulatory authority, available on the website. Investors are invited to consult the most recent financial reports, which are also available on the website. Investors should consult their own legal and tax advisors prior to investing. Given the economic and market risks, there can be no assurance that the financial instrument(s) will achieve its investment objectives. Their value can decrease as well as increase. In particular, changes in currency exchange rates may affect the value of an investment. Performance that is shown net of management fees and is calculated using global returns with time factored in, with net dividends and reinvested interest, and does not include subscription-redemption fees, exchange rate fees or tax. Any gross of fees performance included in this material do not reflect the deduction of commission, fees and other expenses incurred. Returns will be reduced after the deduction of such fees. Past performance is not a guarantee of future results.
This document is directed only at person(s) who have professional experience in matters relating to investments (‘relevant persons’). Any investment or investment activity to which this document relates is available only to and will be engaged in only with Professional Clients as defined in the rules of the Financial Conduct Authority. Any person who is not a relevant person should not act or rely on this document or any of its contents.
All information referred to in the present document is available at www.bnpparibas-am.com.
This is a Marketing Communication for Professional Investors only. No assurance can be given that any forecast, target or opinion will materialise.
As at November 2021.
Expert
Arnaud-Guilhem Lamy
HEAD OF EURO-AGGREGATE BOND MANAGEMENT STRATEGIES
Arnaud-Guilhem is responsible for euro-aggregate's bond management strategies and is also an expert in socially responsible investment (SRI) for bond management
Contact
About BNP Paribas Asset Management
BNP Paribas Asset Management (‘BNPP AM’) is the investment arm of BNP Paribas, a leading banking group in Europe with international reach. BNPP AM aims to generate long-term sustainable returns for its clients, based on a sustainability-driven approach. BNPP AM’s investment capabilities are focused around five key strategies: High Conviction Strategies, Private Assets, Multi-Asset and Systematic & Quantitative Investments (SQI), Emerging Markets and Liquidity Solutions, with investment processes incorporating quantitative and fundamental analysis.
Sustainability is core to BNPP AM’s strategy and investment philosophy. Among the leaders in thematic investment in Europe1, BNPP AM intends to contribute to the energy transition, environmental sustainability and the promotion of equality and inclusive growth globally. BNPP AM currently manages EUR 526 billion of assets (EUR 641 billion of assets under management and advisory) and benefits from the expertise of more than 500 investment professionals and around 400 client servicing specialists, serving individual, corporate and institutional clients in 68 countries.
Source: BNPP AM, as at 31 March 2023
1 Source: 2nd in Europe for active sustainable thematic strategies, according to BNP Paribas Asset Management analysis based on Morningstar data as at 31/12/2022.
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