NN Investment Partners (NN IP) has developed a green bond fund with a shorter duration of around two years, which it said contrasts with interest rate sensitivity of at least five years for other green bond funds.
With a shorter duration, NN IP said the fund would be suited to investors looking for protection against rising interest rates while seeking to act against climate change. Green bonds are used to raise finance for projects that will have a positive environmental impact, such as contributing to the United Nations’ Sustainable Development Goals. The fund manager said that interest rates are at very low levels and spreads of euro green bonds are relatively high, making this a good time for investors to increase exposure to green bonds.
NN IP lead portfolio manager green bonds, Bram Bos, commented: “For investors who want to prioritise sustainability, impact investing (including green bond investing) is the ultimate choice in responsible investment. In fact, allocation to green bonds enables investors to reduce the carbon footprint of their fixed income portfolios and enjoy better governance and greater transparency, without sacrificing liquidity and returns.”