Nordea Asset Management has folded its Nordea 1 – Global Social Bond fund due to “the size of the AUM and muted demand for the single-themed strategy.”
Launched in December 2022, the Article 9 strategy was designed to “address the ‘S’ in ESG”, investing 70% of total assets in social bonds focused on sustainability objectives and abiding by the ‘do no significant harm’ mandate. It was managed by Thede Ruest.
However, according to Morningstar Direct data, while the fund had a one-year return to 15 April of 4%, 2024 has been a tough year, down 0.32% over the year-to-date.
The move comes after Nordea decided to close its in-house emerging market debt capabilities team earlier this year due to “sub-par commercial results”. According to reports, there are currently no plans to fold the Green Bond fund, which was managed by the same team, with a new management team expected to be announced next month.
A spokesperson for Nordea told PA Future: “We remain committed to offering our clients sustainable fixed-income solutions, including Article 9 products, and are currently exploring solutions that better address the needs of asset allocators. Clients are increasingly seeking strategies that capitalise on opportunities across the full spectrum of the sustainable bond segment – which has expanded in recent years – including, but not limited to, social bonds.”
This story first appeared in our sister publication, PA future.