Sustainable Investment Awards 2021

ESG fixed income fund of the year, Asia: Ping An of China Asset Management Fund - China Green Bond Fund

The Ping An of China Asset Management Fund - China Green Bond Fund secured the ESG fixed income fund of the year, Asia award, after impressing the judges during its first full-year since launching.

Grace NgThe flagship fund of Ping An of China Asset Management (Hong Kong) – the offshore investment unit of Ping An Insurance – was launched in November 2019 as the first China-focused green bond fund, providing global investors with much-needed access to the second-largest green bond market in the world.

“China is facing more severe environmental problems than other countries,” said senior fixed income portfolio manager Grace Ng. “We believe that each dollar spent on green projects in China has a much bigger impact on the environment than the same dollar spent in some developed countries.”

Ng said the fund “imposes strict selection criteria to ensure alignment to the international green bond standards,” adhering to the Green Bond Principles and the Climate Bonds Initiative (CBI) standards, whilst evaluating and selecting its bonds.

Since launch, the fund has seen its assets under management almost double to $95 million – with it having deployed all its assets to 45 eligible green bonds across 40 issuers.

Ng expects the fund to continue to quickly grow in the coming years with institutional investors – especially in Europe – under-allocated to Chinese green bonds, despite them offering a higher yield than developed market green bonds yet lower volatility than other emerging market bonds. Asian investors are also showing interest in the fund as sustainable finance awareness expands in the region.

This rising sustainable finance awareness has also fed greater issuer diversity to support the growth of the fund. Ng said the managers are also open to expanding the fund to include other sustainable fixed income instruments beyond green bonds.