Union Investment has launched an institutional mutual fund for municipal investors. The 'UniInstitutional Kommunalfonds Nachhaltig' is a mixed fund geared to the needs of municipalities, which takes account of sustainability criteria and invests predominantly in a safety-oriented manner.
The concept of the fund has been developed in close cooperation with municipal practitioners in order to meet the requirements of the municipal household regulations regarding the investment of municipal funds. On the basis of experts' assessments from several federal states, the aim was to achieve the broadest possible consensus on a framework for investments in municipal assets.
The actively managed mixed fund supports the more safety-oriented investment criteria for public money, with a focus on high-quality bonds. In the current low interest rate environment, the fund seeks to leverage additional revenue opportunities by adding emerging market and high yield bonds. Up to 30 percent of the fund's assets can be invested in selected shares, currency risks are hedged as far as possible.
Union Investment manages more than €40bn in sustainable investments and brings this expertise to the new fund.The total assets under management amount to around €330bn.