LONDON, 3 March 2022 – Aon plc (NYSE: AON) a leading global professional services firm, has launched a sustainable multi-asset credit (MAC) fund in the UK that invests in high-conviction MAC strategies. The fund aims to deliver attractive risk-adjusted returns while focusing on sustainability, including alignment with the United Nations Sustainable Development Goals, and climate transition.
Sustainable MAC invests in bonds that are clearly aligned with environmental, social and governance (ESG) themes. These typically meet one of four criteria: bonds with proceeds that are earmarked for a specific project aligned to ESG goals (known as labelled bonds); bonds from an issuer whose products or services are aligned with ESG goals; bonds where the issuer is a sector leader on ESG themes or is transitioning to a more sustainable business model; or bonds from issuers that are positioned to drive positive change in companies’ practices through active engagement.
All the underlying strategies within the fund are buy-rated by Aon, with the four managed funds selected for their ESG rating of ‘advanced’ in addition to their sustainability and the way in which the managers complement each other. The Aon Sustainable Multi-Asset Credit Fund, which is available to pension schemes that are clients of Aon’s advisory and fiduciary management services in the UK, has assets under management of £167 million, with a further £189 million currently under transition into the fund.
Geri McMahon, partner and co-head of Responsible Investment at Aon, said:
“The Aon Sustainable Multi-Asset Credit Fund is the second fund on our platform – following the launch of the Global Impact Fund in 2020 – that actively pursues ESG opportunities rather than just integrating ESG considerations into the investment process.
“There are compelling reasons for investing in MAC strategies. We believe that the demand for credit will remain strong, and that these strategies offer reduced exposure to rising interest rates compared with traditional fixed income. Their active managers also have the potential to add value.”
Sara Rauf, fixed income ESG research lead at Aon, said:
“Credit spreads have tightened across all sectors after widening in early 2020 and this has reduced expected returns. However, the economic and demand dynamics remain in place for active credit strategies to post attractive returns, as opportunities will continue to emerge across credit sectors. MAC strategies provide the flexibility, diversification and broad range of opportunities that can help schemes navigate new forms of volatility.”
Further details about the Aon Sustainable Multi-Asset Credit Fund can be found at: Sustainable-Multi-Asset-Credit-Fund.pdf.aspx (aon.com)
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