Morgan Stanley launches fixed income ESG fund 14 December 2020UK Reporter: Maddie Saghir
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Morgan Stanley Investment Management (MSIM) has launched the ‘Morgan Stanley UK Sustainable Fixed Income Opportunities Fund’.
Managed by MSIM’s global fixed income investment team, the fund will combine sustainability with an active, flexible approach to investing by identifying the best ideas within the global fixed income universe.
According to Morgan Stanley, the fund aims to offer absolute risk-adjusted returns while making a positive contribution towards a more sustainable and inclusive world.
Morgan Stanley explains the top-down selection process allows the fund to reduce exposure to material environmental, social and governance (ESG) risk and negative sustainability impacts.
It will achieve this by restricting the screening of controversial sectors such as weapons, tobacco, certain fossil fuels, as well as international norms violations.
Moreover, the selection process will tilt the portfolio in favour of the 80 percent strongest sustainability performers across sovereigns and corporates, by sub-sector, as defined by MSIM Fixed Income’s proprietary ESG assessment mythologies.
It will also contribute to positive outcomes based on key sustainability themes, with a particular focus on low carbon footprint.
The fund is designed to be less carbon intensive than its index and will maintain a net positive alignment with the UN SDGs, while also investing in green, social and other labelled sustainable bonds.
Richard Lockwood, head of distribution for Northern Europe, MSIM, comments: “UK Sustainable Fixed Income Opportunities further adds to our fund range offering client’s products that focus on key social issues, climate change and other ESG themes in the investment process whilst aiming to deliver attractive, long-term returns.”
“UK investors are well aware of the challenges faced across all areas of the sustainability spectrum and our fixed income sustainability range offers them an opportunity to align their ESG requirements to their investment goals,” Lockwood concludes.
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