News: Pictet AM launches climate change-focused sovereign debt fund
Press Release - Pictet Asset Management has launched a climate-change-focused fund into the sovereign debt investment space, which will be overseen by senior portfolio manager Ella Hoxha.
The UCITS-compliant strategy named the Pictet-Global Climate Government Bond fund is domiciled in Luxembourg and is classified as Article 9 under the Sustainable Finance Disclosure Regulation guidelines.
The fund invests across developed and emerging markets by allocating capital to countries that are signatories to the Paris Agreement, whose carbon emissions are falling at the steepest rate in absolute terms and relative to the size of their economies.
The investment community currently holds $88tn (€83.32tn) in bonds issued by governments and their agencies globally.
Pictet's team said the new fund's focus may mean leaving out countries that are the mainstay of traditional bond indices offering further diversification benefits for investors.
Some emerging markets are among the largest relative polluters, but Pictet said its fund could also make some of the most significant contributions to solving the climate crisis, particularly as developing countries often feel the impact of extreme weather events the most.
The strategy rewards countries that are showing a positive trend toward lowering their carbon emissions across both developed and emerging markets.
An external advisory board of climate change experts will be consulted to assess the climate change policies and trends of the selected countries.
'Fixed income investors have a key part to play in providing the capital required to keep climate change in check. While individually, investors have a negligible influence on government policy, collectively they can make a real difference,' said Hoxha, who also runs a eurozone-focused sovereign debt fund.