As of May 18, the Raiffeisen-Income has changed to Raiffeisen-ESG-Income as a result, this mixed fund now invests according to ESG criteria. Nothing is changing when it comes to the goal of the fund: generating the most constant returns possible, independent of benchmarks and comparative indices, with a broad, globally diversified fund portfolio.
The Raiffeisen-ESG-Income fund
Raiffeisen-ESG-Income offers investors the trusted, time-tested investment strategy that has been used in the past, but now with a significantly expanded approach that includes sustainability aspects on many levels and takes ESG criteria into account in the selection of the investments.
The mixed fund invests globally on a broadly diversified basis in assets including bonds, equities, money market instruments, other securities, demand deposits, and callable deposits as well as in units of other investment funds on a limited basis (click here for additional information about the structure of the fund.
The fund targets regular returns and moderate capital growth as its investment goal.
The bonds and money market instruments held by the fund can be issued by entities including national governments, companies, and supranational organisations. The fund is actively managed and is not restricted by a benchmark.
Investments in funds are subject to the risks (e.g. price volatility and currency risks) that are typical of securities markets. Of course, these risks also apply to companies and governments for which an investment is justified based on ESG criteria.
Sustainable in many different ways
The securities, investment funds, and financial derivatives held by the fund have to meet certain sustainability criteria:
The thematic focus in the selection of investments in the future will also be geared more towards sustainability issues in some subsegments, for example when it comes to equity investments, e.g. the circular economy, ongoing employee training, higher diversity, sustainable innovation on many levels, responsible financing, responsible insurance policies in the case of insurance companies, and the preservation of biodiversity and water resources.
Raiffeisen Capital Management also attempts to influence the conduct of companies and organisations in the area of sustainability through active shareholder engagement in the course of the management of Raiffeisen-ESG-Income. For example, this includes dialogue with business leaders, voting behaviour at annual general meetings, and other similar activities (for additional information, see “Sustainability criteria”).
In terms of the dividend strategy and in the corporate bond segment, concepts such as “best in class” are used. This means that the companies in an eligible sector or eligible country that have the highest ESG Indicator are selected (the ESG Indicator is a benchmark that is used to allow the sustainability of different companies to be compared). Due to the restructuring of the fund, the ESG Indicator of the corporate bond segment in the fund improved from around 56 to roughly 69,8.
ESG criteria are also applied for Emerging Market bonds, including strict exclusion criteria (e.g. coal production, severe violations of labour rights and human rights). As a result, the government bonds of many emerging nations (but also industrialised countries) may not be held by the fund. Nevertheless, investments can be made in such countries and their currencies, for example through bonds of supranational institutions such as development banks.
The derivatives for the strategies in the multi-asset segment of the fund are selected to ensure that the underlying assets meet a minimum sustainability level. As a result, different stock indices may be selected than in the past, e.g. the S&P 500 ESG index instead of the S&P 500 index.
What you should pay particular attention to
Investments in funds are subject to the risks that are typical of securities markets, up to and including loss of capital. These risks also apply to companies and governments that are positive standouts in terms of sustainability.
The fund can invest more than 35% of its assets in securities/money market instruments from the following issuers: France, the Netherlands, Austria, Italy, Great Britain, Sweden, Switzerland, Spain, Belgium, the United States of America, Canada, Japan, Australia, Finland, and Germany.
The investment strategy permits the fund to predominantly (relative to the associated risk) invest in derivatives.
The investment strategy permits the capital to be invested primarily in deposits.
Further explanation:
The Raiffeisen Kapitalanlage-Gesellschaft m.b.H. continually analyses companies and countries with the help of internal and external research providers. Together with an overall ESG assessment including an ESG risk assessment, the results of the sustainability research are converted into the so-called Raiffeisen-ESG-Indicator, which is based on a scale of 0 to 100. The assessment is made in consideration of the company’s respective branch of business.
Multi-asset strategies combine several securities classes – also referred to as asset classes – in a single fund: for example, equities, bonds, or money market instruments, and often commodities or currencies, as well.
Supranational institutions: Organizations that cannot be assigned to just one nationality.