Aegon AM has announced the launch of the Aegon Investment Grade Climate Transition Fund, described as a new strategy designed to support the global transition to a low-carbon economy while delivering attractive, risk-adjusted returns.
The fund primarily invests in global investment grade corporate bonds, with flexibility to include select high yield bonds and cash. Its objective is to outperform the Bloomberg Global Aggregate Corporate Index over rolling 36-month periods, net of fees, while aligning with clients’ financial, climate, and ESG goals.
Leveraging proprietary climate transition research, the fund focuses on companies with credible, actionable decarbonisation plans. The firm writes that this is complemented by a broader ESG assessment to help mitigate potential risks. The strategy targets a 30 per cent reduction in carbon footprint by 2029 and aims for portfolio net-zero alignment by 2040.
Co-managed by Rory Sandilands, Alexander Pelteshki and Kenneth Ward, the fund is supported by Aegon AM’s global credit research platform of 25 professionals and a dedicated team of 16 responsible investment experts. The firm writes that it builds on the strong track record of the Aegon Investment Grade Global Bond Fund and the success of the Aegon Global Short Dated Climate Transition Fund.
Rory Sandilands, Fund Manager, says: “The launch of the Aegon Investment Grade Climate Transition Fund draws on our longstanding expertise in investment grade credit and deep commitment to responsible investing. It complements our broader suite of climate-aware solutions and reflects our leadership in aligning fixed income portfolios with net-zero goals.
“The current market environment – characterised by elevated corporate bond yields, resilient corporate fundamentals, and a supportive rates cycle – offers a compelling opportunity for investment grade investors. At the same time, the need for credible climate action has never been greater. With our proprietary climate transition research, disciplined security selection, and proven track record, we believe the Fund is well-positioned to deliver resilient, risk-adjusted returns while supporting the transition to a low-carbon economy.”
