Columbia Threadneedle Investments has teamed up with global consortium Inco to launch a new sustainable investing strategy, the Threadneedle (Lux) European Social Bond fund.
The launch follows that of the Threadneedle UK Social Bond fund in 2013 with Big Issue Invest, and its US Social Bond fund in 2015.
The Threadneedle (Lux) European Social Bond fund seeks both a financial and a social return by investing in corporate bonds across Europe. It focuses on supporting positive outcomes for individuals, communities or society as a whole.
The Fund is managed by Simon Bond, director of responsible investment portfolio management at Columbia Threadneedle Investments in London and manager of the UK Social Bond fund.
Columbia Threadneedle’s partner for the fund, Inco, is a Paris-based global consortium for a new, inclusive and sustainable economy and will act as an independent adviser to the strategy.
Domiciled in Luxembourg, the fund will further distributed across other markets (UK, Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland) pending regulatory approval in each country.
Bond said: “We are seeing a growing demand from clients to deploy their savings in a way that can generate social benefits and sustainable positive outcomes. At the same time, we strongly believe that investors need not sacrifice performance to achieve social impact.
“We have a proven track record of over three years in managing outcomes-focused social bond strategies with strong risk-adjusted returns. Out of 4,000 European corporate bonds in the market, we have identified that approximately 45% are social in nature across different sectors and countries.
“ By actively selecting specific bonds with positive social outcomes, rather than excluding bonds through conventional negative screens, we aim to generate positive social and financial results. The portfolio also offers daily liquidity, therefore opening it up to a wide range of investors.”
Positive outcomes are to be achieved through a social opportunity framework that is aligned with the United Nations Sustainable Development Goals (UNSDG). The framework covers social areas such as affordable housing, health, education and employment.
Inco’s founder, Nicolas Hazard said: “As a leading European impact investing organisation, INCO is proud to provide its expertise in the field of social and environmental evaluation to Columbia Threadneedle Investments.
“This partnership shows a common desire to support organisations that make a positive change in their community, whether they are companies, local authorities or non-profits. It fosters our ambition to build a more inclusive and sustainable finance industry.”