Raiffeisen-ESG-Global-Rent: Sustainability meets global diversification

Raiffeisen-ESG-Global-Rent is an attractive bond investment with good global risk diversification between different economic areas, issuers and currencies by covering large areas of the global bond spectrum. The focus is on issuers with high credit ratings from the developed markets. It uses a specially developed concept to assess the sustainability of countries. This is necessary because governments are generally not comparable with companies in terms of their behaviour and objectives. Just think of the wide range of government policies and public projects that can fulfil or violate ESG criteria in many ways. The assessment of states therefore requires a different approach and a large amount of data to be collected and analysed.

Sustainability is a development process

While simple, static ESG concepts often work with many absolute exclusion criteria, we use these sparingly. (Massive restrictions on media freedom is one such example, although this does not (yet) disqualify any country in the EU). Instead, we prefer to focus on certain minimum values for ESG indicators and at the same time take a close look at the direction of development. We also do not believe that only the absolute ESG top scorers (i.e. "ESG model students") belong in a portfolio; quite the opposite. As with companies, lasting improvements in this area should have a positive impact on the economic and financial condition of the countries concerned and thus also be reflected in the performance of a bond. Investing only when a significant part of the improvements has already taken place would be wasting a lot of earnings potential.

Further information on the topic of "Bonds"

Inclusion of CO2 emissions

The CO2 footprint (please also see carbonfootprint report of Raiffeisen KAG) is also taken into account when selecting fund investments. As a result, the proportion of US government bonds in the fund has fallen significantly, for example. From an investor's point of view, however, it does not make sense to do without them completely, as bonds in US dollars with very long maturities in particular can hardly be covered by other issuers, if at all. In the shorter and medium bond maturities, however, other issuers with similar creditworthiness are considered instead of US government bonds. These primarily include national or international development banks, but also US dollar bonds issued by Canadian provinces, for example.

Inclusion of Emerging Markets and corporate bonds

Part of the fund assets of Raiffeisen-ESG-Global-Rent are invested in corporate bonds, currently around 15%. (This figure may change at any time without prior notice and is merely a snapshot). The tried-and-tested sustainability concepts that have been successfully used in Raiffeisen KAG's sustainable corporate bond funds for a long time are applied here. This includes, for example, largely avoiding investments in companies that mine or use coal or commit serious violations of labour and human rights.

You can find further information in our policies here

Current fund positioning

The Raiffeisen-ESG-Global-Rent is currently somewhat more heavily invested in the US dollar and the Japanese yen than the long-term average, at over 50% and over 15% respectively. (The US dollar is in fact the largest currency position in the fund due to the outstanding global importance of the US currency). The fund is currently positioned in emerging market currencies at around 5%. The Japanese currency was increased somewhat some time ago because the fund management sees a high probability of a strong recovery of the yen. After the yen's exchange rate had fallen sharply in recent years, the currency has started a countermovement in recent months. The fund management still sees considerable potential for further price increases. After the yield declines (= price rises) of recent weeks, the average bond maturity in the fund (= interest rate risk) was somewhat reduced and is now roughly in line with the global market average. Corporate bonds currently make up around 14% of the fund portfolio, slightly less than the long-term average.

The Fund Regulations of the Raiffeisen-ESG-Global-Rent have been approved by the FMA. The Raiffeisen-ESG-Global-Rent may invest more than 35% of the fund's volume in securities/money market instruments of the following issuers: United States, Japan, Germany, France, United Kingdom.