PIMCO Australia Launches ESG Global Bond Fund

From

Andrew Balls

PIMCO, a leading global investment management firm, has launched a dedicated Environmental, Social and Governance (ESG) investment platform globally, offering fixed income solutions to investors seeking attractive returns while making a positive social impact.

As part of this platform, the PIMCO ESG Global Bond Fund has been launched in Australia. The Fund, which marks PIMCO’s first dedicated ESG fund offered to Australian clients, has been launched to meet demand from clients looking to incorporate responsible and social considerations in fixed interest investing.

PIMCO’s unique ESG framework is underpinned by three key pillars: Exclusion, Evaluation and Engagement. The process not only excludes companies with business practices that are misaligned with sustainability principles, but also evaluates their ESG credentials and favours those with best-in-class ESG practices. Further, the team engages collaboratively with companies, encouraging them to improve their ESG practices and influence long term change.

The founding belief of this new strategy is that investors in ESG portfolios should not have to sacrifice their financial objectives in order to achieve an ESG impact.  The Fund aims not to compromise on investment returns to achieve social objectives by benchmarking itself against a traditional global bond benchmark, and invests in a range of sovereign and investment grade corporate bonds from around the world. The fund is managed by a team led by Andrew Balls, Managing Director and CIO of Global Fixed Income and Alex Struc, Portfolio Manager and head of ESG portfolio management at PIMCO.

PIMCO globally has also launched a dedicated ESG fund in Europe and the U.K, and enhanced two of its socially responsible funds in the U.S. to incorporate a wider range of ESG considerations into the investment process.

Andrew Balls, Managing Director and CIO of Global Fixed Income, said:  “For many investors, screening out undesirable investment categories isn’t enough anymore; they want to use their investments to promote change in the world. Our ESG Fund provides the tools to do that without compromising on returns.”

Alex Struc, Portfolio Manager and head of ESG portfolio management at PIMCO, said:  “Historically, this type of strategy has been pursued by equity investors but we firmly believe that engagement as a debtholder is equally important. Across the vast fixed income universe, small change can have an enormous positive impact.”

Adrian Stewart, Head of PIMCO Australia and New Zealand, said: “Sustainable investing is increasingly an important focus for many of our clients, yet there is a shortage of compelling ESG-oriented fixed income solutions available to investors. Having spent the last few years developing our processes and team, we are excited to invite Australian investors to participate in what we believe is an engagement-driven, industry-leading ESG platform. We think that PIMCO is in a great position to fill this leadership vacuum in this maturing market.”

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