A long track record of success

For 27 years now, this classic bond fund has been investing in the European bond markets, generating attractive returns for retail and institutional investors alike, during good times and bad times on the exchanges. Over this period spanning almost three decades, Raiffeisen-ESG-Euro-Rent’sperformance has been recognised with numerous awards and prizes. Naturally, this history of past success is no guaranty for success in the future, as results on the financial markets from the past can never be extrapolated into the future. Nevertheless, the experienced, stable team, and the tried and tested investment strategy pursued by the fund management do provide an excellent foundation for the years to come.

Backed by an innovative sustainability concept

While investing sustainably may sound quite simple and has now become fairly commonplace, getting it right is no simple task. For instance, applying ESG criteria to sovereign issuers requires a completely different approach than for companies. Whilst some quite good standards are now available for measuring sustainability in the corporate world, this is much harder to do for sovereigns. One need only consider the wide range of political orientations and public projects, which can satisfy ESG criteria in a number of different ways, or – conversely – violate them.

Of course, in general, sovereigns cannot be compared to companies in terms of their actions and objectives, and thus a different framework is needed to assess them. To make this possible, Raiffeisen KAG’s fund management has worked diligently for years to develop a sustainability concept for investment in government bonds. In addition to establishing certain minimum thresholds for ESG indicators, the fund management also focuses on the direction of development, not just the current level of development.

What has changed and what is staying the same?

• As in the past, Raiffeisen-ESG-Euro-Rent concentrates on issuers with good and very good credit ratings (investment grade).

• About one half of the fund assets continue to be invested in corporate bonds and the other half in bonds placed on the market by sovereign, state-affiliated, or supranational issuers.

• Bonds from countries which are not classified as sustainable are no longer included in the fund. Within the European Union, for example, this applies to France, based on its nuclear power policy. Consequently, the fund management replaces French government bonds with investment alternatives that are as close to France as possible. Among others, these include euro bonds issued by French regional governments and bonds from institutions owned by the French state, which carry out very specific social and/or economic tasks.

• In the corporate bond segment, companies from the tobacco and oil industry are no longer included in the investment universe, along with some other power utilities which rely heavily on nuclear power, for example.

Eyes on the future

In addition to focusing on responsible, sustainable business practices by the companies themselves, the fund management also concentrates on firms that are strongly involved in the key Future Transformation Topics of the modern day and age. These topics are ones that are critical to the development of humankind and the protection of the environment, the global climate, and natural resources. For instance, they include issues such as the circular economy, mobility, health care, energy, and new, ground-breaking technologies.

Investors who wish to learn more about sustainable investments can find additional in-depth information at www.investment-zukunft.at.