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Pimco preps ESG bond fund in Singapore

The firm is expected to roll out more ESG solutions in Asia.

Pimco has filed an application with the Monetary Authority of Singapore (MAS) to launch the Climate Bond Fund, according to the regulator’s website.

It is still waiting for regulatory approval and once approved, it will be available to retail investors in the Lion City.

Managed by Scott Mather, Jelle Brons, Ketish Pothalingam and Samuel Mary, the product was originally launched in December last year. It aims to seek optimal risk adjusted returns, consistent with prudent investment management, while giving consideration to long term climate related risks and opportunities, according to its factsheet.

The product is currently only available in Europe and the US, and it will be the firm’s first ESG fund available to retail investors in Singapore, according to FE Fundinfo.

“With more bond issuers committing to climate action, and with over $600bn of green bonds outstanding, we believe there are attractive investment opportunities in this market,” Mather, managing director and Pimco’s CIO of US Core Strategies, said previously during the product’s launch in the US.

“We have seen a dramatic shift in activity over the past few years: sustainable bond issuance is rising, client questioning of ESG practices is increasing and, most importantly, responsible investing is becoming more mainstream,” Kim Stafford, Pimco’s Asia-Pacific head, told FSA.

The firm already offers other ESG solutions to both institutional and retail clients, Stafford said, adding that the firm is planning to launch more ESG strategies in Asia as demand for sustainable products is increasing in the region, including in Hong Kong and Singapore.

In Asia, the firm offers three ESG funds to accredited investors in Singapore, the Global Bond ESG Fund, the Global Investment Grade Credit ESG Fund and the Emerging Markets Bond ESG Fund, according to FE Fundinfo.

Other asset managers that are expected to roll out ESG bond funds in the Lion City include JP Morgan Asset Management and Manulife Investment Management.

ESG in Singapore

Asset managers in Singapore continued to accelerate their ESG adoption in line with global trends. As much as 40% of assets managed in Singapore incorporate ESG factors, with negative screening and ESG integration the most common strategies, comprising about 66% of those assets, according to a recent MAS survey.

“The pandemic has reinforced the importance of integrating sustainability into investments to safeguard against risks, while concurrently generating long-term value through better alignment of investment portfolios with global developments on climate and sustainability policies,” the survey noted.

Moreover, in June this year, Jacqueline Loh, deputy managing director at the MAS, urged asset managers operating in Singapore to launching more ESG and sustainable funds.

“Asset managers should seize this opportunity to launch robust green and sustainable focused fund strategies, in anticipation of rising demand from investors in a post-Covid-19 world,” she said in a keynote speech during the Asian Venture Philanthropy Network Virtual Conference in Singapore.

Part of the Mark Allen Group.