The Swedish SPP Green Bond fund has hit the three-year mark with more than SEK3.7bn (€365m) in assets and a claim to be the world’s biggest of its kind.
Helena Lindahl, senior portfolio manager, said the performance of the portfolio relative to peers in the same Morningstar category illustrated that there are no reasons remaining not to invest in green bonds. In 2017, the fund outperformed in the Short Bond funds Sweden category, representing some 27 bond funds. The same year it was awarded a “silver medale” in a sustainability evaluation of some 3,000 funds conducted by insurance broker and adviser firm Söderberg & Partners.
The fund is structured like a traditional bond fund, with the objective of offering easy entry to green investments and fit into traditional investment portfolios. Investments are made in green bonds that have been externally reviewed and that are linked to businesses and projects deemed to have a positive impact on the environment and society. Investments cover sectors including renewable energy, waste management, and water treatment and drinking water supply.
Transitioning to a low carbon economy requires interaction with the green bond market, added Lindahl.
A number of the top 10 holdings are bonds issued in Sweden. However there is exposure to other regions, such as holdings of bonds issued by the European Investment Bank and the African Development Bank.