Federated Hermes launches Article 9 global credit fund with CCLA

Fund aims to deliver a total return with a reduced environmental footprint

Federated Hermes has launched an Article 9 global credit fund with sustainable investment manager CCLA.

The Federated Hermes Sustainable Global Investment Grade Credit Fund will be weighted to sustainable leaders, but will “opportunistically” invest in issuers with clear momentum in sustainability.  

It will be co-managed by senior portfolio managers Nachu Chockalingam and Orla Garvey.

The aim of the fund is to deliver a total return with a reduced environmental footprint compared to the benchmark.  

This is measured using carbon, water and waste footprint metrics.

An exclusions framework will be used for investments in the fund. 

It will also use a high barrier to entry for names entering the portfolio, using the teams’ proprietary scoring models and engagement expertise.

The fund conforms with Article 9 of the Sustainable Finance Disclosure Regulation and sits within Federated Hermes sustainable range of products. 

Sustainable fund range

It follows the launch of the Federated Hermes Sustainable Global Equity fund in 2021. 

These launches form part of a fund range segmentation project, allowing clients to easily select funds based on their sustainability requirements.

This latest launch builds upon a well-established relationship between Federated Hermes Limited and CCLA. 

Last year, Federated Hermes Limited’s Credit team was appointed by CCLA as the portfolio manager for two of its fixed income funds.

Ben Funnell, head of investment solutions at CCLA said: “Investment grade credit as an asset class has become substantially more attractively valued over the last 15 months, in our view, and now offers sufficient margin of safety to allow us to invest.  

“We expect good real returns from the sector given starting yields today. Federated Hermes has significant expertise in the space, and aligns with our firm’s and our investors’ values in terms of responsible investing.”