Second AP Fund develops strategy for green bonds
The Second AP Fund allocates one percent of its total strategic portfolio to ‘green bonds’, making this asset class part of the Fund’s broad investment strategy. This marks a new strategic approach with regard to the Fund’s investments in sustainability – and a further step along the way to making sustainability an integral part of the asset-management process.
The Second AP Fund has decided to allocate one percent of its total strategic portfolio to ‘green bonds’ and to benchmark this allocation against the Barclays/MSCI Green Bond Index. This is a strategically important decision that will further enhance the Fund’s efforts in the field of sustainability. Furthermore, the Fund has additional investments in green and social bonds, which are managed as part of its existing portfolio of global bonds. The Fund’s total current investments in green bonds amount to SEK 4.2 billion.
‘Green bonds’ is a collective term for bonds issued with a view to funding environment-related investments. The Second AP Fund’s fixed-income portfolio management team has extensive experience of sustainable investment. When the Fund first invested in green bonds, in 2008, it was one of the first in the world to invest in this asset class.
“The percentage of green bonds featured in the active bond portfolio has risen sharply in recent years and we feel that the market has now achieved a maturity and size to justify a separate investment strategy and their definition as an individual asset class. We are therefore breaking out our holdings in green bonds from the fixed-income portfolio, to manage them in accordance with a dedicated investment strategy. This strategic move offers the Fund clear means of combining solid returns with an allocation of resources to the global sustainability challenge,” says Lars Lindblom, portfolio manager at the Second AP Fund.
“We are a player engaged in investment on the global bond market. The return we require on green bonds in no way differs from other investments, although our preference is a green bond rather than another instrument of similar value,” states Lars Lindblom.
For further details, please contact Lars Lindblom, portfolio manager (fixed-income) at +46 (0)31-704 29 00, or Ulrika Danielson, Head of Communications, at +46 (0) 31 704 29 29.