ODDO BHF Asset Management is extending the integration of ESG (Environment, Social, Governance) criteria to its ODDO BHF European Convertibles Moderate fund.
Since 2010, ESG criteria have been integrated to European equity portfolios and investment grade credit funds, ODDO BHF Asset Management is following through on the strategy and further expanding its coverage of the investment universe.
The ESG assessment of each company complements the fundamental financial analysis. In the case of ODDO BHF European Convertibles Moderate, it impacts the overall portfolio structure by limiting exposure to issuers presenting lower ESG scores. The fund manager ensures that the overall ESG quality level of the portfolio meets the set standards, which are uniquely high for this asset class. The overarching goal being to limit ESG-specific risks and to contribute to sustainability targets.
Nicolas Jacob, head of ESG Research at ODDO BHF AM, said: "Our unique ESG approach for convertible bonds demonstrates our ambition for sustainability. After equities and corporate bonds, this is a further step in the adjustment of our investment products. The trend towards the integration of ESG criteria into asset management is irreversible and highly significant for many of our clients."
"The inclusion of ESG aspects in our strategy aims to improve portfolio quality in the long term. It is no coincidence that the latest defaults seen in the convertible bonds market, Folli-Follie or Nyrstar for example (businesses in which we were not invested) concerned companies with significant Governance issues", added Olivier Becker, head of Convertible Bonds and Target Date Funds at ODDO BHF AM SAS.
"By integrating demanding ESG factors into our investment process, we intend to improve the fund's risk-return profile. This could lead to even more robust investment results in the future."
As of 30 June 2019, approximately € 6.9bn of the assets managed by ODDO BHF AM, representing 12% of total assets under management, have incorporated ESG criteria into their investment process, including open-ended funds (among them ODDO BHF Avenir range, ODDO BHF Corporate Bonds…) and bespoke solutions.