Investment Strategy
The Berenberg Sustainable Euro Bonds fund invests primarily in EUR-denominated bonds that create environmental and social added value. To participate in the development of the euro bond market, the fund manager identifies attractive issuers and bonds that make an active contribution to solving global challenges such as climate change, water scarcity or demographic change. The fund invests in various bond segments (i.e. corporate and financial bonds, quasi-sovereign bonds and covered bonds) with good credit ratings (investment grade). Interest rate and credit risks are actively and flexibly managed at the portfolio level to increase return expectations and reduce risks.
- Diversified and flexible EUR bond portfolio
- Active positioning against a market benchmark
- Average duration is between 5 and 7 years
- Investment segments are primarily (quasi) government bonds as well as corporate and financial bonds
Learn more about our Berenberg Fixed Income investment philosophy
Further details on the opportunities and risks of this fund can be found in the sales prospectus.
Indexed performance
Performance in 12-month periods
Currencies
Sectors
Countries
Asset classes
Top Holdings
Monthly market comment
Growth concerns came to the forefront and inflation in the US and Europe continued to fall, prompting the ECB to cut interest rates for the second time by 25 basis points (bp) to 3.50% on 12 September. The Fed also joined the interest rate cuts of most of the other G10 central banks with a delay, but started with a large interest rate cut of 50 bp on 18 September. Yields on 10-year German government bonds fell by 17 bp. Risk premiums on corporate bonds widened early in the month as recession fears and concerns that the Fed would not cut rates sufficiently weighed on the market. However, they recovered over the course of the month and rose marginally by 2 bp. Primary markets are on track for a record year of new issuance as they continued to gain momentum in September.
Portfolio Management
Felix Stern
Felix Stern joined the Asset Management division of Berenberg in 2000 as a fixed income portfolio manager. Currently he is heading the fixed income selection team within the Asset Management and is responsible for institutional mandates. As a senior portfolio manager he is responsible for the selection of corporate and financial bonds as well as short-term bond market investments. He is also the lead manager for several of Berenbergs institutional mutual funds. Prior to joining Berenberg, he worked several years for the Market Research department of British American Tobacco, Germany. Felix is a CCrA - Certified Credit Analyst (DVFA) and also has a German Diploma in business economics from the Fernuniversität in Hagen.
Consideration of ESG Elements
Identifying companies and business models that will be successful in the long term is the basis for good investment decisions. Environmental, Social and Governance (ESG) factors are key factors in decision making and are therefore integral
components of the investment process.
ESG Score
The data provider MSCI ESG uses an ESG score of 0 to 10 to assess the management of material ESG risks of portfolio holdings compared to competitors.
ESG Controversies Screen
Investments in the fund are monitored for ESG controversies and, with the help of MSCI ESG data, flagged according their severity. Thereby, potential ESG risks of investments are identified. In the case of an orange flag (severe controversy), we enter into an active exchange with the company. In the case of a red flag (very severe controversy), the company is excluded.
