This fund is for fixed income investors looking for ESG exposure across various asset types.

Specialist fixed income manager BlueBay Asset Management, which is owned by the Royal Bank of Canada, announced the launch of the BlueBay Total Return Diversified Credit ESG Fund. It is a multi-asset strategy suitable for ESG-oriented investors in fixed income assets. (ESG Today)

The fund will provide exposure to its ESG-focused ‘best ideas,’ across global high yield, bank loans, financial capital bonds, structured credit, convertible bonds, emerging markets and developed market investment grade categories.

Lloyd’s of London, a leading insurance company, will invest in the fund at launch.

BlueBay Total Return Diversified Credit ESG Fund

The ESG filters applied by the fund will exclude investments in companies deriving revenues from oil sands and arctic drilling, as well as companies involved in controversial weapons or tobacco, and limit exposure to companies with revenues derived from thermal coal or fossil fuel exploration and production.

The fund will also avoid countries which have not signed up for the Paris Agreement on climate.

Blair Reid, Senior Portfolio Manager, said: “Investors want more ESG without sacrificing returns. Our innovative approach is to target a similar yield to our standard MAC strategy by adjusting the credit risk within our MAC ESG strategy (BB on average for MAC ESG, versus BB+ for standard MAC). We are excited to be launching this latest iteration of our multi-asset credit offering. It feels an understatement to say that investors are increasingly focused on the impact their money is having on the world from an ESG perspective, so for us, this fund is a natural next step in the evolution of our product suite.”

Related Story: RBC Global Asset Management has launched the RBC BlueBay Global Bond Fund