Ella Hoxha, Pictet
The Pictet-Global Climate Government Bond fund invests across developed and emerging markets by allocating capital to countries based on their approach to managing carbon emissions.
The fund aims to incorporate climate change, which is the most pressing ESG component currently driving government policies, into the sovereign investment space, said Pictet Asset Management.
“Our strategy rewards bond issuers that are addressing climate concerns, while we will penalise those that are less committed,” said Ella Hoxha, senior portfolio manager for the fund.
“Consequently, our portfolio will be allocated differently to standard global bond indices, offering investors a more diversified portfolio with a lower carbon footprint.”
Hoxha co-manages the fund with Andres Sanchez Balcazar, who has been with the firm since 2011.
The fund invests in countries whose carbon emissions are falling at the steepest rate relative to the size of their economy, which then also provides the benefit of diversification by leaving out some countries which are the mainstay of traditional bond indices.
The Geneva-based asset manager noted that while some emerging markets countries can be among the largest relative polluters, they can also make some of the most significant contributions to solving the climate crisis.
Apart from the internal selection process, the fund also engages an external advisory board of climate change experts to assess the climate change policies and trends of the selected countries.
Pictet-Global Climate Government Bond fund is aimed at investors in some European countries and in Singapore, who are seeking a global government bonds risk/return profile with a reduced carbon footprint.
Pictet Asset Management has $262bn in AUM at 31 March 2022 and has offices worldwide including in Hong Kong and Singapore.