US investment giant BlackRock has added an “environmentally positive” fixed income investment product to its range of UCITS funds.
The Green Bond Index Fund has been launched in response to the “growing demand from investors for this fast-growing part of the fixed income market”, the company said in a statement announcing the product. BlackRock said that the product is a natural fit due to its “extensive experience” of managing Green Bond mandates, pointing to its work as a partner of the Climate Bonds Initiative and as an Executive Committee Member of the Green Bonds Principles.
The Green Bond Index Fund will offer investors exposure to a selection of fixed income securities that are issued to fund projects with direct environmental benefits. The fund will be optimised to deliver investment performance which reflects the total return of the Bloomberg Barclays MSCI Global Green Bond Index, the statement said.
Ashley Schulten, director, head of Climate Solutions (Fixed Income) and co-manager of the fund, said: “We see a strong interest in Green Bonds from clients we service, as they seek to participate in climate friendly and environmentally beneficial investments, without making major changes to sector allocation, or liquidity risk in their holdings.
“Clients interested vary from large institutional clients to family offices and retail investors.”
As an early investor in Green Bonds and a supporter of global standards and impact reporting, BlackRock believes that it is well positioned to now offer a UCITs fund for this new asset class.
The fund is managed by Ashley Schulten and Darren Wills who have a combined investment experience of over 35 years. The managers are supported by BlackRock’s Global Fixed Income team.
BlackRock manages over US$1.57 trillion (according to BlackRock data, as at 31 December 2016) in fixed income assets on behalf of global clients, including both active and index strategies.