Mirova, the affiliate of Natixis Investment Managers specialising in sustainable investment, announced today the launch of two bond funds classified as Article 9 under the SFDR: the Mirova Euro High Yield Sustainable Bond Fund and the Mirova Euro Short Term Sustainable Bond Fund, both aligned with a 2°C climate scenario.
Mirova is expanding its fixed income range with the launch of the Mirova Euro High Yield Sustainable Bond Fund and the Mirova Euro Short Term Sustainable Bond Fund. Mirova’s bond strategy now encompasses solutions that can be adapted to various bond market conditions, giving investors access across a broader economic spectrum while supporting environmental and social development.
Both funds will benefit from Mirova’s unique and integrated management process, underpinned by the expertise of its Sustainable Development Research team of over 15 analysts. Since 2014, the team has developed its own methodology at both the issuer and a green and sustainable issuance programme level, based on opportunity and risk analysis. A proprietary analysis is also applied to each issuer, which is assessed according to its level of compliance with the United Nations Sustainable Development Goals (SDGs).
Then, using the credit analysis integrated into the bond management team, managers combine in-depth fundamental and valuation assessments.
By investing in both green and social bonds from all types of issuers and in conventional corporate bonds that contribute to the energy transition, Mirova excludes from its investment selection any programmes or companies whose sustainability projects or strategies are not considered sufficiently ambitious. Like all other Mirova funds, these new portfolios will adhere to a maximum 2°C scenario to participate in the decarbonisation of the economy, while most bond indices are aligned with scenarios ranging from 3°C–3.5C°.
“Today, more than ever, we must give priority to financing that contributes to environmental and social development. 2022 has unfortunately shown us that the problem of energy dependence must be addressed as quickly as possible and integrated into a longer-term energy transition plan. Our two new funds align with this wish and with Mirova’s mission”.Hervé Guez, CIO of Equity and Fixed Income and Social Impact at Mirova
The Mirova Euro High Yield Sustainable Bond Fund
To accelerate the financing of the energy transition, Mirova has decided to broaden its management offering to smaller companies that are sometimes less highly rated by the big credit rating agencies but with a higher potential return. The High Yield segment4 is composed of impact-generating companies with a critical need for financing.
Of particular interest are companies specialising in medical care, sustainable mobility, clean packaging, recycling/waste treatment, and sustainable real estate.
Mirova seeks to identify companies that it believes are working towards a more eco-friendly and sustainable planet and society and which promote a circular economy. The conservation and reuse of scarce resources will be central to their strategy.
This fund offers a portfolio of approximately 80 issuers with credit rating upgrade potential and the possibility of robust yields, whose solutions are helping accelerate the transition towards a more sustainable economic model, while maintaining a risk profile mid-way between equities and bonds and a moderate duration.
The Mirova Euro Short Term Sustainable Bond fund
Given the markets’ transition from a negative interest rate environment to higher rate levels in line with inflation expectations for a large part of the investment world, Mirova sought to complete its existing bond offering with a fund that combines positive impact and low duration5. This fund seeks to reduce the negative impact of increasing interest rates on the absolute performance of the portfolio and to benefit from yields on maturities of less than four years, which have now become attractive again.
Beyond the market context, the Mirova Euro Short Term Sustainable Bond Fund, like the rest of the company’s funds, underlines the firm’s desire to accelerate investments in companies that provide solutions for participating in environmental and social development. The fund invests in green and sustainable bond programmes and many companies that need short/medium-term financing to address and provide solutions to sustainable development issues.
As with all of Mirova’s bond offerings, thanks to an in-depth ESG analysis of issuers and green and sustainable programmes, the portfolio will be aligned with a maximum 2°C global warming scenario and will be classified as Article 9 under the SFDR regulation.