Triodos Investment Management (Triodos IM), the investment arm of Triodos Bank, is launching the Triodos Sterling Bond Impact Fund – a bond fund at the lower end of the risk/return spectrum rated with an SRRI of 3/7 based on simulated past performance data. It is the first time Triodos IM has issued a fund in GBP.
The new Fund, which will be open for pre-launch subscriptions from 24 September (and is expected to launch on Monday 2 November) at the price of £20 per share, bolsters the Triodos impact investment portfolio across the two main asset classes (equity and bonds) helping to scale impact investments in the UK.
It forms part of Triodos Bank UK’s existing portfolio of impact investment funds – Global Equities Impact Fund and Pioneer Impact Fund, both positioned on the risk/return spectrum as 5/7 and 6/7 respectively.
Made up of corporate, social and green bonds and UK gilts, the Fund is open for initial subscriptions from 24 September and is available in a Triodos Stocks & Shares ISA.
The growth and diversification of the award-winning Triodos IM portfolio is part of the global growth of the impact investment market, which is estimated to be worth $715bn, and increasing investor interest in the market. Triodos IM has a 30-year track record and has been an industry frontrunner in these forms of impact investments, which aim to protect and promote quality of life for all.
The new Fund aims to generate positive impact and stable income from a concentrated portfolio of investment-grade, GBP denominated bonds issued by listed companies, semi-public institutions and UK gilts. Issuers and projects are selected for their contribution to the Triodos IM seven sustainable transition themes and going beyond standard environmental, social and governance (ESG) criteria. Additionally, all those listed in the fund must comply with the strict Triodos Bank minimum standards.
The growing popularity of impact investing is helping to fuel the growth and diversification of investment funds, such as those provided by Triodos IM. The latest Triodos Bank Annual Impact Investing Survey reported that awareness of impact investing is higher than in any year since the survey was started in 2016, with 66% of investors saying they would like to support companies that contribute positively to society and environment.
The Fund has an investment strategy which is similar to the Triodos Euro Bond Impact Fund from Triodos IM, which is available outside of the UK.
William de Vries, director of Impact Equities & Bonds at Triodos Investment Management, said:“We wanted to design a product for the UK market that could offer impactful investments, but at a lower risk for those looking to diversify their portfolio or to start investing for impact. The fixed income bond market is huge, and we know there is great potential for helping to scale the impact investment industry by offering bonds. Our highly experienced team of fund managers and analysts believe that fixed income investing, when done consciously and with purpose, can have meaningful positive impact on society and help to support sustainable solutions for today’s global challenges.”
The Fund will include bonds from companies that are helping to lead the way in terms of environmental stewardship, social responsibility, ethics and governance. For example, those that are engaging with their employees and customers and are employing strategies to reduce energy, water and waste usage or have adopted meaningful social inclusion programmes or are excelling as role models in workplace equality.
Gareth Griffiths, Head of Retail Banking at Triodos Bank UK, said: “We anticipate that the fund will be well received by British investors, given the growing interest in impact investing and its continued success in these difficult times. Diversifying our UK portfolio is an important step for us as we look to provide a range of options to complement the different risk appetites of impact investors, who are looking to make holistic decisions by protecting the environment and promoting quality of life for all, while generating a financial return. We’re proud to be leading the way in the UK with these quality funds and hope they encourage more people to consider investing for impact and for our future.”
William de Vries continued: “Our funds deliver long term impact and offering a fund for fixed income investing through bonds provides an important last piece in the puzzle, as quite simply, due to most investments being debt (bonds), without doing so impact investing cannot scale.”