We are helping investors understand, control and benefit from the quantifiable trade-offs between carbon reduction and tracking error. Most importantly, we are demonstrating that significant improvements in carbon intensity can be achieved with minimal impact to credit quality or interest-rate risk relative to corporate bond benchmarks.
The State Street Low-Carbon Corporate Bond Strategy is a long-only investment approach that enables the creation of customized portfolios that can minimize tracking error for a targeted level of carbon reduction or maximize carbon reduction for a targeted level of tracking error.
Aligning for the Future
As investors look to align their portfolios with the transition to a low-carbon economy and minimize potential exposure to climate risk — which could arise from regulation and carbon tax — the Low-Carbon Corporate Bond Strategy provides a straightforward, effective way to take the first step.
The State Street Low-Carbon Corporate Bond Strategy seeks to create customized portfolios with a lower carbon footprint and similar returns to the performance of the client’s selected fixed income benchmark.
The Strategy is designed to create customized portfolios that achieve the client’s goals for carbon reduction within constraints for tracking error, credit quality, duration, interest rate exposure and other factors.
Two Customizable Features
Target Level of Carbon Reduction
Clients select a target range of carbon reduction that they would like to achieve, relative to the benchmark index.
Clients select the benchmark to represent their chosen starting universe; available benchmarks include any diversified developed market corporate bond index.
Using this strategy we can now create customized portfolios for clients that have significantly lower carbon footprints but nonetheless produce similar returns to their selected fixed income benchmarks.
The strategy is available now to help investors reach their goals for reducing carbon emissions without compromising their investment objectives.
Hong Kong: State Street Global Advisors Asia Limited, 68/F, Two International Finance Centre, 8 Finance Street, Central, Hong Kong. T: +852 2103-0288. F: +852 2103-0200.
All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and SSGA shall have no liability for decisions based on such information.
Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors.
Past performance is not necessarily indicative of the future performance. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
This website is issued by is State Street Global Advisors Asia Limited and has not been reviewed by the Securities and Futures Commission.