The asset manager Bantleon has aligned the investment strategy of the institutional mutual fund Bantleon Hybrid Corporate Bonds, which has been successfully managed since 2016, with sustainability criteria. Going forward, the bond fund will take into account the investment limits of the BVI concept and the criteria of the BaFin guideline for sustainable investment funds. It therefore complies with Article 8 of the EU Sustainable Finance Disclosure Regulation and is also suitable for investors with sustainability preferences within MiFID II and IDD (Article 8+) thanks to the integrated consideration of Principal Adverse Impact (PAI) indicators. This positioning is reflected in the new fund name Bantleon Select Corporate Hybrids ESG. In order to make the successful strategy accessible to private investors, a corresponding share class has also been incepted.
Sweet spot on the bond market
»By consistently positioning our investment strategy in line with ESG criteria, we are responding to the requirements of numerous institutional clients and sales partners,« explains Gerd Lückel, member of the Executive Board of Bantleon Invest AG. »With Bantleon Select Corporate Hybrids ESG, sustainability-oriented investors can also benefit from the attractive characteristics of corporate hybrids, which are considered a sweet spot on the bond market.« These subordinated bonds enable returns similar to those of high-yield bonds – with the difference that the issuers have a significantly lower default probability. The recovery phases following drawdowns are also significantly shorter than in the high-yield segment.
Two mutual funds for subordinated bonds issued by industrial companies
Bantleon offers institutional and private investors two mutual funds that invest exclusively in subordinated bonds from investment-grade industrial companies – the subordinated bonds themselves are usually rated two levels below: Bantleon Select Corporate Hybrids and Bantleon Select Corporate Hybrids ESG. While Bantleon Select Corporate Hybrids is defensively positioned and complies with Article 8, Bantleon Select Corporate Hybrids ESG is slightly more offensive and serves sustainability preferences within MiFID II and IDD (Article 8+) by taking PAI indicators into account. Additionally, there are segregated accounts for institutional investors. In total, Bantleon manages about 840 million euros in corporate hybrids.
