Sustainable Fixed Income

We believe sustainability is a long-term, secular shift: consumers are demanding sustainable products and services, governments are introducing sustainable policies, and companies are evolving their business models to address environmental and social issues. The sustainability shift presents compelling opportunities for investors to generate alpha and contribute to a more sustainable global economy.

Leveraging our rich history of responsible investing and time-tested fixed income capabilities, we developed the Sustainable Fixed Income strategy, a sustainability-themed approach to multi-sector fixed income investing. Guided by a proprietary sustainability research process, the strategy seeks to outperform the benchmark over the long term by investing in a range of fixed income securities that are aligned with sustainable megatrends.

Sustainable Fixed Income Overview
Objective Generate competitive returns over the long term by investing in fixed income securities with a favorable sustainability profile
Benchmark Bloomberg Barclays US Aggregate Index
Investment Style
  • Pursue sustainable financial returns alongside positive social and environmental impact
  • Seek to optimize risk/reward profile by combining sustainable and economic factors
  • Invest in a range of fixed income securities and issuers with a favorable sustainability profile
  • Research-intensive process incorporates proprietary methodology to determine sustainability and economic potential
  • Engage with issuers to enhance sustainability
Universe Primarily focused on US investment grade corporate bonds, US and foreign government securities as well as mortgage-backed and asset-backed securities. May opportunistically invest in high yield bonds, emerging market debt and municipal bonds.
Inception Date April 1, 2019
Vehicles & Minimums Separate account minimum: $50 million

Sustainable Investment Opportunities

Using a proprietary sustainability assessment process, research analysts identify issuers with products, services and assets that may contribute to the long‐term sustainability of the global economy, environment and society. This rigorous bottom-up sustainability assessment is tailored to the sector and issuer type including corporate bonds, sovereign debt, structured securities and municipal bonds.

Opportunities span five sustainability pillars: Climate Change, Eco Solutions, Resource Efficiency, Health and Well-being and Sustainable Growth.

Sustainability Pillar Investable Areas Sector examples

Climate Change

-"Green" buildings
-Recycling and composting services
-Environmental
-SASB CMBS
-REITS
-Green bonds

Eco Solutions

-Renewable energy
-Hybrid/electric vehicles
-Cloud-based computing
-Technology
-Data Center ABS
-Automotive
-Solar ABS

Resource Efficiency

-Use of recycled inputs
-Sustainable agriculture
-Water services
-Agriculture
-Industrials
-Commercial PACE

Health & Well-being

-Nutritious, sufficient food
-Personal hygiene
-Medicines and vaccines
-Educational services
-Consumer products
-Pharmaceuticals
-Student loan ABS

Sustainable Growth

-Affordable housing 
-Mass transit
-Stable, effective sovereign governments
-Agency MBS
-Sovereigns
-Transportation

Experienced portfolio management team

 

Brad Doyle 

Jeremy Mead

Jose Pluto

     

James Rich

 

Jeremy Thurm

 

Distinguishing characteristics

Differentiated research framework Proprietary sustainability process Experienced team, consistent process
  • Dedicated sector-focused credit research team covers issuers across the quality spectrum
  • Specialized emerging markets and structured research teams expand research coverage
  • ESG integration can help identify opportunities and risks
  • Research-driven approach with centralized committee-based decision making
  • Customized sustainability determination process for corporates, structured, sovereign and municipals
  • Global Responsible Investment team engages issuers to help further enhance sustainability
  • Seasoned portfolio management team has 20 years of industry experience
  • Extensive experience managing core and core plus strategies
  • Adhere to a disciplined, transparent and repeatable process

The benchmark is the Bloomberg Barclays US Aggregate Index. Percentages based on market value as of 3/31/2020. Numbers may not add due to rounding. The portfolio information above reflects a representative account. Credit ratings reflect the Bloomberg Barclays credit quality methodology. Average quality excludes cash and securities that are not rated. The credit quality of a security or group of securities does not ensure the stability or safety of the overall portfolio. 

1 The Sustainability Pillar Allocation reflects holdings excluding cash and cash equivalents, based on the United Nations' Sustainable Development Goals as well as Aegon AM US' impact categories and sustainability pillars. All information is provided for informational purposes only. Click here for term definitions.