Altius Asset management chief investment officer Bill Bovingdon said a “well-diversified investment portfolio” should have an exposure to bonds, but investors wanting “responsible investments” have very few options available.
“Unfortunately there are limited investment options available to investors looking for fixed-interest investments managed with regard to environmental, social and corporate governance (ESG) principles,” Mr Bovingdon said.
“As a result, fixed income may have been left out of their investment portfolios, which has restricted diversification and performance,” he said.
“Often investors use bank-issued hybrids as their main solution. However hybrids include equity-like risks so lack the defensive characteristics that bond investors require,” Mr Bovingdon said.
Mr Bovingdon also said in response to an “increasing number of investors” wanting responsible investing options Altius has launched the Altius Sustainable Bond Fund, a diversified Australian fixed-interest portfolio.
“We are seeing an increasing number of investors mentioning responsible investing as a consideration for them and decided to launch a fund that meets this growing demand while at the same time delivering solid, stable returns,” Mr Bovingdon said.
“Bonds will be automatically excluded from the fund’s investment universe if the primary business activity of the issuer is clearly at odds with the fund’s ESG principles,” he said.
“The remaining investment universe is screened in line with the Altius Sustainability Policy, with companies in the universe given a sustainability rating which is incorporated into the portfolio construction process,” Mr Bovingdon said.