Aegon Asset Management launches climate transition fund for investment grade corporate bonds

Aegon Asset Management has announced the launch of a new investment grade climate transition fund. Aegon AM, which has $351bn in asset under management and advisement, says the fund will primarily invest in global investment grade corporate bonds.

The fund aims to outperform the Bloomberg Global Aggregate Corporate Index over rolling 36-month periods, net of fees. It will target a 30% carbon footprint reduction by 2029 and a net zero portfolio alignment by 2040.

The strategy builds on Aegon AM’s experience in managing the Aegon Investment Grade Global Bond Fund as well as the Aegon Global Short Dated Climate Transition Fund.

“The launch of the Aegon Investment Grade Climate Transition Fund draws on our longstanding expertise in investment grade credit and deep commitment to responsible investing. It complements our broader suite of climate-aware solutions and reflects our leadership in aligning fixed income portfolios with net-zero goals”, said fund manager Rory Sandilands.

Sandilands will co-manage the new fund alongside Alexander Pelteshki and Kenneth Ward. The fund will identify companies based on the credibility of corporate transition plans.

“The current market environment - characterised by elevated corporate bond yields, resilient corporate fundamentals, and a supportive rates cycle - offers a compelling opportunity for investment grade investors. At the same time, the need for credible climate action has never been greater”, says Sandilands.

To implement the strategy, the fund will leverage’s Aegon AM’s proprietary climate transition research capacities.

“With our proprietary climate transition research, disciplined security selection, and proven track record, we believe the Fund is well-positioned to deliver resilient, risk-adjusted returns while supporting the transition to a low-carbon economy”, Sandilands adds.