City Wire Selector, by CHRIS SLOLEY
French group seeks to capitalise on huge surge in social bonds issuance over 2020.
Amundi is targeting the huge upswing in social bonds issuance with the launch of a dedicated fixed income fund.
The Social Bond Strategy will be overseen by Amundi’s Alpha Fixed Income team, which includes managers with expertise in both global and European bond investments.
Isabelle Vic-Philippe, head of Euro aggregate, will be lead portfolio manager for the strategy, with Alban de Faÿ, head of fixed income socially responsible investing process, and Dany da Fonseca, fixed income Euro investment grade credit, as co-portfolio managers.
Amundi said the strategy will mostly be invested in social bonds aligned with the International Capital Markets Association’s Social Bond Principles (SBP) whose proceeds will be used for projects compliant with the SBP Project Categories.
In addition, Amundi will include regular bonds issued by sovereigns and corporates selected for their strong social practices. The portfolio may also include innovative instruments such as sustainability-linked bonds with social targets.
This launch is part of Amundi’s drive to become a leader in sustainable asset management and builds on its work to expand into the emerging markets green bonds space.
Social bonds are those categorised as aiding social change or around societal elements, such as employment. Issuance of these types of bonds trebled in 2020 and were supported by huge programmes, such as the European Union issuing €17bn worth of social bonds in October.
The team will undertake a rigorous screening and analysis of social bonds in order to ensure quality at both issuer and issuance levels.
Most social bond issuers are currently sovereign, supranational and agencies (SSAs), mirroring the early days of the green bond market. Amundi also intends to foster the development and diversification of the market in years to come.