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US Sustainable Fixed Income

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FACTSHEET (98KB) PDF
COMMENTARY (84KB) PDF

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We believe sustainability is a long-term, secular shift: consumers are demanding sustainable products and services, governments are introducing sustainable policies, and companies are evolving their business models to address environmental and social issues. The sustainability shift presents compelling opportunities for investors to generate alpha and contribute to a more sustainable global economy.

 

Leveraging our rich history of responsible investing and time-tested fixed income capabilities, we developed the US Sustainable Fixed Income strategy, a sustainability-themed approach to multi-sector fixed income investing. Guided by a proprietary sustainability research process, the strategy seeks to outperform the benchmark over the long term by investing in a range of fixed income securities that are aligned with sustainable megatrends.

 

 

Aegon AM US Sustainable Fixed Income
Objective Generate competitive returns over the long term by investing in fixed income securities with a favorable sustainability profile
Benchmark Bloomberg US Aggregate Index
Investment Style

• A sustainability-themed approach to multi-sector fixed income investing

• Pursues long-term alpha by combining sustainable and economic factors

• Simultaneously provides positive social and environmental impact potential

• Emphasizes six key sustainability pillars: climate change, eco solutions, resource efficiency, health and well-being, inclusion and sustainable growth

• Relies on a research-intensive process and proprietary sustainability assessment framework

• Aims to advance sustainability by proactively engaging with issuers
Universe

Primarily focused on US investment grade corporate bonds, US and foreign government securities as well as mortgage-backed and asset-backed securities. May opportunistically invest in high yield bonds, and emerging market debt.
Inception Date

April 1, 2019
Vehicles & Minimums*

• Separate account minimum: $50 million

• Private fund minimum: $1 million*

• Sub-advised mutual fund minimum: $1 million

* For qualified investors only. 

Strategy availability may be limited to certain investment vehicles. Not all products are available or suitable for all investors and this information should not be considered an offer of products or services to any investor in any jurisdiction. 

 

Sustainable Investment Opportunities

Using a proprietary sustainability assessment process, research analysts identify issuers that they believe may contribute to the long‐term sustainability of the global economy, environment and society. This rigorous bottom-up sustainability assessment is tailored to the sector and issuer type including corporate bonds, sovereign debt, and structured securities.

 

Opportunities span six sustainability pillars: Climate Change, Eco Solutions, Resource Efficiency, Health and Well-being, Inclusion and Sustainable Growth.

 

Sustainability Pillar Investable Areas Sector Examples
Climate Change -"Green" buildings
-Waste collection/recycling		 -Environmental
-SASB CMBS
-REITS
Eco Solutions -Renewable energy
-Hybrid/electric vehicles
-Cloud-based computing		 -Technology
-Data Center ABS
-Automotive
-Solar ABS
Resource Efficiency -Use of recycled inputs
-Sustainable agriculture
-Water services		 -Agriculture
-Paper/packaging
Health & Well-being -Nutritious, sufficient food
-Personal hygiene
-Medicines and vaccines
-Educational services		 -Consumer products
-Pharmaceuticals
-Student loan ABS
Inclusion

-Empowerment of women and minorities
-Equal pay for equal work

-Financials
-Social bonds
Sustainable Growth

-Affordable housing
-Reliable infrastructure 
-Stable, effective sovereign governments

 -Agency MBS
-Sovereigns
-Sustainable bonds

 

Distinguishing characteristics

Differentiated Research Framework

 Proprietary Sustainability Process Experienced team, Consistent process
  • Global credit research framework with industry experts covering investment grade, high yield and EM Debt Research
  • Specialized sovereign and structured research teams expand research coverage
  • ESG integration can help identify opportunities and risks
  • Research-driven approach with centralized committee-based decision making
  • Customized sustainability determination process for corporates, structured and sovereigns
  • Responsible Investment team engages issuers to help further enhance sustainability1
  • Seasoned portfolio management team
  • Extensive experience managing multi-sector strategies
  • Adhere to a disciplined, transparent and repeatable process

 

1Engagement will occur with some, but not all, issuers where the manager deems it appropriate. 

 

All investments contain risk and may lose value. Responsible investing is qualitative and subjective by nature, and there is no guarantee that the criteria utilized, or judgement exercised, by any company of Aegon Asset Management will reflect the beliefs or values of any one particular investor. Responsible norms differ by region. There is no assurance that the responsible investing strategy and techniques employed will be successful. Investors should consult their investment professional prior to making an investment decision. The firm's research teams may incorporate ESG-related factors into their analysis as applicable to their asset class and the output may differ as warranted.

Latest Insights

Responsible Investing

Green bonds: Peeling back the label

14/01/2021 | 5 min read | Julius Huttunen, CFA
Responsible Investing

Sustainability & Credit Spreads: From Leaders to Improvers

01/03/2021 | 5 min read | Sean Fanning, CFA | Tom Zorawski, PhD | Max Zhang, FRM
Responsible Investing

Podcast: Sustainable investing beyond green bonds

17/02/2021 | 3 min read

 
As of March 31, 2024. Past performance is not indicative of future results. Returns are gross and net of management fees and include the reinvestment of all income. Returns for period longer than 12 months have been annualized. Click here for a definition of the index.
 

Source: Aegon AM. Percentages based on market value as of March 31, 2024. Numbers may not add due to rounding. The above information represents the top 10 largest long positions in the representative account based on the aggregate dollar value. The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the account and the reader should not assume that investments in the securities identified and discussed were or will be profitable. All information is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned. Top 10 holdings excludes cash and cash equivalent positions. Top 10 holdings excludes cash and cash equivalent positions. Click here for term definitions.

 

*Reflects holdings, excluding cash and cash equivalents, based on the United Nations' Sustainable Development Goals, Aegon AM’s sustainability pillars and the firm’s proprietary sustainable categories.

 

**Effective June 1, 2022, credit quality calculations are sourced to Aegon AM and reflect a proprietary methodology. Credit quality calculations prior to June 1, 2022, may be different. Credit ratings for the portfolio reflect the Bloomberg Indices credit quality methodology which is the middle rating of the three agencies, if only rated by two agencies it uses the lower rating and if only rated by one entity it uses that rating. Ratings are calculated by applying the methodology to available ratings from rating agencies. If the rating is NR on a structured security, the methodology will look to both DBRS and Kroll and use the lower rating; if rated by one, use that rating; else it will remain NR. Average Quality excludes cash and securities that are not rated. The credit quality of a security or group of securities does not ensure the stability or safety of the overall portfolio. NR includes securities that are not rated by S&P®, Moody’s®, or Fitch and may contain bonds, equities and/or bank loans.

 

***Yield-to-worst should not be interpreted as performance. Please see the composite trailing return data herein.

Portfolio managers

Brad Doyle, CFA

Brad Doyle, CFA

Head of Investment Grade credit

Brad Doyle, CFA, is head of investment grade credit and a portfolio manager responsible for the portfolio management of investment grade credit strategies, multi-sector portfolios and the Sustainable Fixed Income strategy.

Full profile
Jim Elliott

Jim Elliott

Senior Investment Manager

Jim Elliott is a senior investment manager in the US public structured team focusing on RMBS and CMBS.

Full profile
Emily Phelps, CFA

Emily Phelps, CFA

Portfolio Manager

Emily Phelps, CFA, is a portfolio manager within the client investment solutions group responsible for overseeing highly customized, multi-sector insurance company product portfolios.

Full profile

Aegon Asset Management US

 

Important Disclosures

Past performance is not indicative of future results. The net of fees performance is time weighted and includes the reinvestment of dividends, interest, and other earnings, and is calculated net of model fees and expenses. The gross of fees performance figures do not reflect the deduction of investment advisory fees (as described in the firm's ADV, Part 2),  and other expenses. Cash is included in the calculation of performance. The client's return will be reduced by the management fees and any other expenses it may incur in the management of its investment advisory account. The volatility of the performance shown may be materially different from the individual performance attained by any specific investor. In addition, client holdings may differ significantly from the securities that comprise the index. It is not possible to invest directly in an index, which also does not take into account trading commissions and costs. In addition, the actual investment advisory fees incurred by the client will vary according to the asset classes in the account and the size of the account.  An individual client's actual returns may differ from the results shown for reasons such as the timing of investments and withdrawals.

 

The US dollar is the currency used to express performance.

 

Aegon AM US claims compliance with the Global Investment Performance Standards (GIPS®). Please contact Aegon AM US at 877-234-6862 to obtain a GIPS Composite Report for the strategy presented in this advertisement.

 

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.