Sustainability and ethics have made inroads into the investment spectrum over the past decade, but it is really on the last few years that they have become visible on the Australian fixed income landscape.
At the forefront of this development is the Sustainable Bond Fund from Altius Asset Management. Like most other ethical or sustainable investment initiatives, the fund managers use screening methodologies that involve putting an ethical overlay on the corporate bond market to ensure issuing companies involved in any activities that fall into the categories outlined by the fund sustainability screen are not considered for inclusion in the fund universe.
The fund has an investment objective to outperform, before fees, the better of the Bloomberg AusBond Composite Bond 0+ Years Index +1% p.a. and the RBA cash rate through a cycle.
The real money is made by using what Altius calls “high conviction and high quality trades to exploit the mispricing of bonds at all stages of the economic cycle.” The fund takes a diversified approach to fixed interest funds management, combining both credit and duration strategies, and seeks to optimise returns for investors in all market conditions.
This fund is pitched at investors who require exposure to fixed income investments that offer relatively stable returns and regular income, want a relatively high level of capital preservation, have at least a three-year investment timeframe; and are looking for a fixed income fund that considers environmental, social and governance issues.