NN Investment Partners (NN IP) has expanded its green bonds fund range with a short-duration products, whose aim it is to protect investors in a rising interest rate environment.
The new fund will apply the same strategy as the NN Green Bond fund, but with a shorter duration of two years, compared to the usual duration of five years or longer for the rest of the sector.
The aim of green bonds is to use the proceeds to finance new or existing projects that have a measurable positive impact on the environment, such as contributing to the United Nations' Sustainable Development Goals (SDGs).
The firm believes these instruments are particularly suited to the current low interest-rate environment in Europe.
Bram Bos, lead green bonds portfolio manager, said: "For investors who want to prioritise sustainability, impact investing (including green bond investing) is the ultimate choice in responsible investment. It identifies not only qualitative but also quantitative proof that the investments contribute to global welfare.
"Additionally, investors face no additional costs when investing in green bonds. 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."
NN IP is the largest market participant in terms of open-ended green bond funds, nearing the €1bn mark in AUM.
The new fund, like the NN (L) Green Bond vehicle, is domiciled in Luxembourg, and its shares are registered in Luxembourg, Denmark, Sweden, Norway, Finland, Belgium, France, the UK, Austria, Italy and the Netherlands.