In addition to long-term financial returns, the UI-Aktia Sustainable Corporate Bond aims to achieve significant social and environmental benefits by investing in European sustainable development bonds. Initially, the fund will be available to both domestic and foreign professional institutional investors, but it will made available to retail investors as well at a later stage.
Aktia has launched the new UI-Aktia Sustainable Corporate Bond fund on 1 September 2022.
It is classified as a so-called dark green fund in accordance with Article 9 of the EU Sustainable Finance Disclosure Regulation. The fund invests only in green, social, and responsible bonds as well as sustainability-linked bonds (SLB), and each investment object is also required to have a positive net impact, considering, for example, the impact on society and the environment.
In assessing the sustainability of investment objects the corporate bond fund uses, for example, the ISS ESG climate risk analysis as well as company-specific ESG assessments and analyses. Aktia also utilises ESG data produced by Morningstar (Sustainalytics). The investment objects’ net impact on the social and ecological environment are continuously analysed and reported through the AI-based impact tool developed by the Finnish Upright Project.
“Aktia has been carrying out portfolio management that takes sustainable development into account for a long time, and we have been reporting on the impact profiles of our equity and corporate bond funds via Upright’s tool since 2019. However, there is a growing demand on the market for investment products with clearly measurable sustainability impacts. It is great to be involved in the creation of this dark green corporate bond fund, which is still rare even in Europe, and where investment objects do not only comply with the sustainable development objects but also generate significant social or environmental benefits,” says Jonne Sandström, Portfolio Manager of the new fund.
UI-Aktia Sustainable Corporate Bond will initially be available to professional institutional investors, but the objective is to make the fund available to retail investors at a later stage. The fund is also sold to professional institutional investors internationally through Universal-Investment-Luxembourg S.A., Aktia's fund distribution partner in Europe. In Finland, the pension insurance company Veritas has entered the fund as a seed investor with EUR 20 million.
“As a pension investor, it is important for us to invest responsibly but without compromising returns. This fund combines the skills of experienced portfolio managers and the innovative mindset of a startup – and it does all this with domestic expertise. We want to support concrete actions to promote sustainability,” says Ville Iso-Mustajärvi, Portfolio Manager at Veritas.
While UI-Aktia Sustainable Corporate Bond primarily invests in investment grade bonds, it can diversify up to 20% of its investments to high yield bonds with a rating of at least BB -. An exception to this is unrated bonds, in which up to 3% of the fund can be invested. The largest individual sectors for the fund's investments are financial services and utilities, with a wide company-level diversification. Regarding sustainable corporate bond categories, the majority of investments are directed towards green bonds.
Aktia has taken ESG issues into account for a long time in its investment activities. The company also systematically develops its climate strategy published in 2021. As part of its climate strategy, Aktia joined the international Net Zero Asset Managers initiative at the end of 2021. The initiative in support of emission restrictions, which has become a financial standard, offers more concrete tools for sustainability work. Aktia has also participated in CDP’s Non-Disclosure Campaign and the CDP-led Science Based Targets project. Moreover, Aktia reports annually on climate change in the CDP portal. In 2021, Aktia became a public supporter of TFCD (Task Force on Climate-related Financial Disclosures) and reports in accordance with these recommendations. As an indication of Aktia's expertise in financial management, Morningstar awarded Aktia as Finland's best fund house in February 2022. Aktia won the award as the best fixed income fund house for the eighth time.