BNP Paribas Asset Management rebranded its existing Asia bond fund for an ESG-themed fund for sustainable urbanization goals. In Asian cities, ESG-themed bonds are highly attractive in the region. The BNP Paribas Sustainable Asian Cities Bond fund aims at helping Asian cities to meet urbanization challenges, climate change impact and inclusive growth. Based in Luxembourg, it was formerly BNP Paribas’ Funds Asia ex-Japan Bond fund.
BNPP AM said that the firm is ready to retain the structure of the existing sub-fund. It also has revamped the investment process rationale as well as rebuilt the asset allocation. The legacy fund was a collaboration from the Asian sovereign bonds in Korea, Indonesia, and BNP’s own RMB bond fund. The firm added that the new fund does not have any local currency exposure and a new benchmark.
In order to save costs and time, it’s very usual for fund managers to rebrand the funds. In the first quarter, Morningstar had identified 63 repurposed funds in Europe, said IFR Asia. The firm’s regional strategy theme is to capture the multi-decade growth opportunities offered by sustainable urbanization in Asia.
BNP argued that this Asia focused fixed income strategy is the first fund in Asia. The classification of Article 9 is under the EU’s Sustainable Finance Disclosure Regulation. It means that it owns objective sustainable investments. Asia itself covers half of the world’s population. The firm expects to see more urbanization in the coming decades. Therefore, sustainable adaptation is a significant priority. Furthermore, ESG-fund is suitable in Asia due to the extreme weather and temperature.
In the region, Asia’s regulatory environment also moves towards sustainability disclosure to drive capital towards issuers. Xuan Sheng Ou Yoong, ESG analyst at BNPP AM said that the firm sees a great urgency for Asian cities to undergo sustainable change.
