Allianz Global Investors has become the latest in a string of institutions to launch a green bond fund - as recently revealed by Environmental Finance.
The investment arm of German insurer Allianz has become the ninth company to launch a green bond fund this year, with more expected to enter the space.
The Allianz GI Green Bond Fund will be co-managed by Hervé Dejonghe and Julien Bras, fixed income portfolio managers in Allianz's socially responsible investment team, based in Paris.
It will invest in green bonds issued by corporates with investment-grade ratings and some sovereign, supranationals and agency issues. It will only invest in bonds issued in Organisation for Economic Cooperation and Development (OECD) currencies.
Despite the strict eligibility criteria, the fund will invest part of its capital in non-green bonds to maintain its performance, at least to begin with.
"As we do not simply want to rush into the market, compromising quality and performance," said Dejonghe. "We will invest at inception a portion of the assets in non-green bonds issued by corporates with strong environmental behaviour. Gradually, the fund will move towards a 100% exposure to green bonds as the market continues to deepen and broaden."
The Luxembourg-listed UCITS fund, launched with roughly €30 million of capital, will be open to both retail and institutional investors and will have three different share classes, all denominated in euros. The classes have:
- a fee of 0.64% a year
- a fee 0.6% and a minimum investment of €1 million
- a fee of 0.42% and a minimum investment fee of €10 million.
Last month, Axa Investment Managers, the investment arm of French insurer Axa, launched a similar green bond fund.
So far this year, green bond funds have been launched by Mirova [link] – Natixis' responsible investment arm – Erste, SEB, Raiffeisen Bank, State Street, Storebrand and Humanis.
Companies also rumoured to be launching green bond funds include Amundi, BlackRock and French bank Banque Postale.