Threadneedle (Lux) European Social Bond Fund

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At a glance

A European credit fund with an innovative social focus that unlocks the full potential of corporate bonds to deliver both financial and social returns.
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Reasons to invest

  1. Innovative approach: The fund unlocks the full potential of bonds with the aim to deliver both financial returns and positive social outcomes. Using a dynamic social research methodology to guide investment decisions, the portfolio manager actively sources bonds that combine clear social benefits with sound financial attributes.
  2. Strength in partnership: Our strong reputation across both fixed income credit and social investment is enhanced by our social partnership with INCO*, an organisation focused on the European social economy and a leader in assessing sustainable social businesses.
  3. Proven track record in social bond investing: We have managed outcomes-focused social bond strategies for over three years and have delivered risk-adjusted returns for our investors.
* INCO operates under the auspices of Europe’s leading social enterprise: Groupe SOS and Le Comptoir de l’innovation.

Investment approach​

We use an outcomes-focused approach to deliver both social and financial returns. We first identify bonds that offer potential to deliver outcomes across a hierarchy of seven social development needs (see image above), to form a European-based social universe of approximately 1,900 securities. This potential investable universe represents around 45% of the benchmark index constituents, which is supplemented by selective off-benchmark bonds. Investment opportunities are categorised according to the type of impact they offer, and each is also rated according to the social focus and characteristics of the outputs.

In parallel to this our Investment Grade Credit team evaluates these bonds using our established credit research process to ensure that investment ideas meet the necessary financial and liquidity requirements for inclusion within the portfolio.

The fund’s social partner INCO further researches and assesses the social outcomes of investments made, as well as forming part of the Social Advisory Panel to review, advice and monitor the fund’s investments from a social performance perspective. This ensures that resulting outputs, outcomes and impacts are framed against a widely recognised framework developed for the EU Commission. This will shape the final assessment of the social benefit and outcome and form the basis on which INCO will assess and report on the social performance of the investments and fund.

Key facts

Launch date
23 May 2017
Benchmark index
Composite index comprising:
50% Bank of America Merrill Lynch Euro Non-Sovereign Index;
50% Bank of America Merrill Lynch Euro Corporate Euroland Issuers Index
Number of holdings
60-100 (at launch)
Liquidity
Daily
Investable social universe
Benchmark constituents and selective off-benchmark bonds. The fund can access corporate bonds in a manner consistent with UN Sustainable Development Goals.
Social partnership
INCO acts as the social partner to the fund and is responsible for researching and assessing the social outcomes of investments on a post-trade basis, as well as forming part of the Social Advisory Panel to review, advise and monitor the fund’s investments from a social performance perspective.

Share classes available

Share
Class
Curr
Tax
AMC
Entry charge
Min Inv.
Launch date
ISIN
SEDOL
BBID
WKN/Valor/CUSIP
Hedged
IE
Acc
EUR
Gross
0.40%
0.00%
100.,000
23.05.17
LU1589836722
BYQH648
TEUSCIE LX
A2DPC6
No
IEP
Inc
EUR
Gross
0.40%
0.00%
100.000
23.05.17
LU1589837290
BYQH671
TEUSIEP LX
A2DPC9
No
ZE
Acc
EUR
Gross
0.40%
0.00%
1.500.000
23.05.17
LU1589837373
BYQH682
TEUSCZE LX
A2DPDA
No
LE
Acc
EUR
Gross
0.30%
0.00%
100.000
23.05.17
LU1589837613
BYQH6C6
TEUSCLE LX
A2DPDD
No

Fund Manager

Simon Bond
Director of Responsible Investment Portfolio Management

Documents

PDF

Responsbile Investment Quarterly

PDF

Social Investment Guidelines

PDF

Commentary

Important Information

For use by Professional and/or Qualified Investors only (not to be used with or passed on to retail clients). Threadneedle (Lux) is an investment company with variable capital (Société d’investissement à capital variable, or “SICAV”) formed under the laws of the Grand Duchy of Luxembourg. The SICAV issues, redeems and exchanges shares of different classes. The management company of the SICAV is Threadneedle Management Luxembourg S.A, who is advised by Threadneedle Asset Management Ltd. and/or selected sub-advisors. This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.
Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available from the Legal Document section of this website. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. The fund characteristics described above are internal guidelines (rather than limits and controls). They do not form part of the fund’s objective and policy and are subject to change without notice in the future.
Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Sociétés (Luxembourg), Registered No. B 110242, 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com
INCO is an investment firm with nearly a decade-long track record investing in socially inclusive and environmentally sustainable enterprises with compelling financial returns. Through both an international network of start-ups, support programmes, as well as local expert teams, INCO provides long-term equity and quasi-equity, from seed to growth stages. INCO complements its financial investments with strategic and technical assistance to support the growth, development and impact of its portfolio companies. INCO acts as an independent advisor of the Fund, providing its expertise in the field of social and environmental evaluation. They are responsible for researching and assessing the social outcomes of investments made in the European Social Bond Fund on a post-trade basis, as well as forming part of the Social Advisory Panel to review, advise and monitor the fund’s investments from a social performance perspective. They also produce the annual impact report for the Fund. This partnership shows a common desire to support organisations that make a positive change in their community, whether they are companies, local authorities or non-profit organisations.
The LuxFLAG ESG Label is valid for the period ending on 1 October 2021. Investors must not rely on LuxFLAG or the LuxFLAG Label with regard to investor protection issues and LuxFLAG cannot incur any liability related to financial performance or default.

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