PETALING JAYA: Kenanga Investors Bhd has launched the Kenanga Sustainability Series: High Yield Bond Fund, which seeks to provide income and capital growth by investing in the Global High Yield ESG Bond Index Fund managed by Northern Trust Asset Management.
The target fund tracks the risk and return characteristics of the ICE BofAML Global High Yield Index which is subject to certain environmental, social, and governance (ESG) exclusions and ESG weightings.
Executive director and CEO Ismitz Matthew De Alwis (pix) said the fund is the first Sustainable and Responsible Investment (SRI)-qualified high yield bond fund in the local market. It will offer investors a more robust portfolio stemming from ESG analytics which will consider factors such as carbon efficiency and quality of governance to mitigate risks or capture new opportunities aside from the standard quantitative and qualitative metrics during evaluation.
“This is an advantageous time to launch the fund, given that markets have priced in the effect of the anticipated six to seven additional interest rate hikes in the US. Going forward, the performance of global high yield bonds will be determined by the financial health of issuers, and in that regard, credit fundamentals remain supportive of the asset class. All in all, a combination of strong fundamentals and inherent downside mitigation properties versus other risk asset classes makes it a value-add tilt and presents investors with an opportunity to enjoy enhanced regular income and potential capital appreciation in current market conditions,” remarked De Alwis.
He said the collaboration with Northern Trust will see it focusing on the development of more ESG-driven products which will create more entry points for investors, as opposed to the difficult-to-access products currently in the market.
With presence across the UK, North America and Asia-Pacific, Northern Trust Asset Management brings to the partnership a comprehensive network of investment professionals with over three decades of managing socially responsible portfolios.
The fund is the second fund launched under the Kenanga Sustainability Series, a suite of multi-asset class products rooted in sustainability considerations to advance long-term financial growth for investors and to generate social and financial value for surrounding communities. The fund is suitable for sophisticated investors with a medium to long-term investment horizon, and has a minimum initial investment amount of RM5,000.
