Nordea Asset Management has launched the Nordea 1 – Global Social Bond Fund, a strategy the company said has been designed to “address the ‘S’ in ESG.”
The Luxembourg-registered Sicav qualifies as an Article 9 fund under the EU’s Sustainable Finance Disclosure Regulation, investing in social bonds focused on sustainability objectives and abiding by the “do no significant harm” mandate.
It is the fifth fund Nordea has launched to address the social aspect of ESG, the others being its Global Green Bond, Global Social Empowerment, Global Climate and Social Impact, and Global Gender Diversity funds.
According to Nordea, the fund will dedicate 70% of total assets in social bonds issued by companies, financial institutions or public authorities, the proceeds of which are used to raise funds for new and existing projects with positive social outcomes. In addition, at least two-thirds of total assets are invested in debt securities with a long-term rating of AAA/Aaa or lower, but not lower than BBB-/Baa3, or the equivalent.
Thede Rüst and Anton Nykvist manage the fund, alongside Nordea’s Global Green Bond strategy. The latter is down 16.5% this year, and sits in the fourth quartile according to data displayed in The Financial Times.
“Debt markets play a crucial role in funding the projects vital for a sustainable and more equitable future,” said Rüst. “The solution focuses on the ‘S’ in ESG, which is increasingly a focus area for investors. We cannot achieve a sustainable world without tackling the pressing social problems facing society today.”
