Nordea AM targets return and impact from suite of new Article 9 bond funds

Nordea Asset Management (NAM) has unveiled a new suite of sustainable bond strategies, with the launch of the Nordea 1 - European Corporate Sustainable Labelled Bond and Nordea 1 - European Sustainable Labelled Bond funds.

Classified as Article 9 under SFDR, NAM’s new strategies combine the alpha-generation skills of the group’s credit and rates teams with the expertise of its award-winning responsible investment (RI) team. To ensure adherence to state-of-the-art ESG standards and real-world impact, these funds apply a double ESG due diligence on both the issuer and the use of issue.

The sustainable and labelled bonds asset class has developed significantly in recent years, with the European market currently valued at about €480bn and tailwinds including the EU’s need to fund sustainable projects, NAM said.

This segment of the market now includes green bonds, social bonds, sustainable bonds and sustainability-linked bonds, all of which have recognised standards for issuers to ensure that either their proceeds are used for projects aligned with sustainable objectives or that the issuers are meeting sustainability performance targets.

As this market matures, NAM said it sees a growing demand for sustainable bond funds from asset allocators, which are increasingly moving from ‘thematic’ approaches to asset-class-based investing.

Christophe Girondel, global head of distribution at NAM, said: “With more than 30 years’ experience in ESG investment and as a trailblazer in ESG bond funds, NAM is launching Article 9 products designed to deliver both returns and tangible impacts. These building blocks are ideal for asset allocators creating sustainable fixed income portfolios.”

The Nordea 1 - European Corporate Sustainable Labelled Bond Fund is managed by NAM’s credit team. Its primary focus is euro-denominated investment grade labelled corporate bonds and non-labelled corporate bonds, where the issuers are involved in activities that contribute to an environmental or social objective.

The Nordea 1 - European Sustainable Labelled Bond Fund is managed by NAM’s fixed income rates team. Its main focus is euro-denominated investment grade labelled bonds issued or guaranteed by sovereigns, sub-sovereigns, supranational or government-owned entities.