CT Net Zero Transition Buy and Maintain Credit Funds
An actively managed buy and maintain credit strategy with a formal commitment to net zero
The strategy provides exposure to credit markets through bonds that mature over discrete periods. This provides stable income, minimises transaction costs and aligns cash flows with future liabilities. The strategy implements explicit net zero targets with assets being managed under a Net Zero Framework.
Our experience
26+ years
Experience of managing buy and maintain credit
£16bn+
Managed globally in buy and maintain credit*
£35.6bn
AUM in strategies explicitly linked to ESG criteria*
* Source: Columbia Threadneedle Investments, data as at 31 December 2023.
Our approach
1. Fundamental stability of revenues and cashflows:
Our approach to investment grade credit is based on high-quality, bottom-up, issuer research. For buy and maintain, this is tilted towards stability of revenues and cashflows which enable the companies to withstand shock.
2. Team-based approach to investment grade:
A team of over 20 dedicated portfolio managers and analysts, debating issuers, industries and market outlook, results in the best investment decisions for our clients.
3. Downside Risk Management:
We understand that in this asset class we risk our clients’ capital to earn stable cash flows. Downside risk management is the main starting point to managing credit portfolios successfully.
David Dudding
Gestore di Portafoglio
Characteristics
Maturity buckets:
2024 – 2030
2031 – 2038
2039 – 2046
Maturity buckets:
2024 – 2030
2031 – 2038
2039 – 2046
Expected return:
Gilts + 1.0% over a full market cycle
Expected return:
Gilts + 1.0% over a full market cycle
Base currency:
GBP
Base currency:
GBP
Launch date:
October 2024
Launch date:
October 2024
Management style:
Maturing Buy and Maintain
Management style:
Maturing Buy and Maintain
ESG style:
ESG Elevated*
ESG style:
ESG Elevated*
Number of issuers:
100–150
Number of issuers:
100–150
Credit rating:
BBB- or above at purchase
Credit rating:
BBB- or above at purchase
Issuer exposure:
AAA: 5%; AA: 3%; A: 2%; BBB: 1.5%; Sub-IG: 1.5%
Issuer exposure:
AAA: 5%; AA: 3%; A: 2%; BBB: 1.5%; Sub-IG: 1.5%
Interest rate exposure:
At least 50% GBP bonds.
Portfolio hedged to GBP
Interest rate exposure:
At least 50% GBP bonds.Â
Portfolio hedged to GBP
FX:
Hedged to GBP
FX:
Hedged to GBP
Vehicle:
Luxembourg FCP
Vehicle:
Luxembourg FCP
* Source: PRI definition: uses ESG factors to assess the sustainability of companies and countries.
ESG objectives
Implementation of ESG objectives aligned to Article 8 under SFDR*
Carbon emissions reduction aligned to a global Net Zero pathway:
- ‘Top-down’ portfolio emissions reduction in line with a global net zero pathway
- ‘Bottom-up’ assessment of asset alignment and target for at least 70% of portfolio emissions to be aligned or aligning
Elevated standards of sustainability:
- Limit investment in Weapons, Tobacco, Fossil Fuels and Electricity Generation
Enhanced standards of good governance:
- Formal review policy for lowest ESG scores and companies with severe breaches of UN Global Compact Principles
*Article 8 of the Sustainable Finance Disclosure Regulation (SFDR) requires that financial products promote environmental or social characteristics
Meet the team
Rebecca Seabrook is a Portfolio Manager in the Credit team. She joined Columbia Threadneedle through the acquisition of BMO GAM (EMEA) in 2021, having previously been with BMO since 2001. Prior to joining the group, Rebecca worked as a Fund Manager for Rothschild Asset Management and Friends Ivory & Sime, having begun her career with London and Manchester as a Credit Analyst. Rebecca graduated from the University of Wales in 1995 with a BA in Accounting and Finance. She holds the IIMR and is a member of UKSIP.
Richard Ferris is a Client Portfolio Manager in the Investment Solutions team and is responsible for the delivery of investment outcomes to clients. Richard joined Columbia Threadneedle through the acquisition of BMO GAM (EMEA) in 2021, having previously been with BMO since 2015. He joined the group from Mercer, where he had spent five years as a Principal and Investment Consultant. Prior to that he worked in the investment consulting team at PwC for three years and at Friends Provident as senior analyst on their ALM team. Richard is a Fellow of the Institute of Actuaries and has a BSc in Physical Sciences from University College London.
Andrew Brown is a Portfolio Manager within the Credit team. Andrew joined Columbia Threadneedle through the acquisition of BMO GAM (EMEA) in 2021, having previously been with BMO since 2006. Prior to this, he worked for M&G Investment Management as a Credit Analyst. Andrew holds an MSc in Investment Analysis from the University of Stirling and an MA in Economics from the University of Edinburgh and is an Associate of the CFA Society of the UK.
Why are pension schemes turning to buy and maintain credit?
Insights
Endgame – the benefits of ‘buy and maintain’ credit
Exploring credit as an option for defined benefit schemes looking to reduce risk and seeking reliable cashflows.
Allocating to credit step by step
In our latest Trustee Training video on credit investing, we dive into journey planning and look at two low dependency credit strategies available to maturing pension schemes.
No Autumn chills for Global Investment Grade Corporate fundamentals
IG valuations remain tight, and the market remains focused on whether this is justified by fundamentals. Our bottom-up company analysis shows profitability remains strong and leverage modest.
CT Net Zero Transition Low Duration Credit
A short-dated global credit strategy with a formal commitment to net zero by 2050.
No Autumn chills for Global Investment Grade Corporate fundamentals
IG valuations remain tight, and the market remains focused on whether this is justified by fundamentals. Our bottom-up company analysis shows profitability remains strong and leverage modest.
Full fund details
CT Net Zero Transition 2024-30 Buy and Maintain Fund
CT Net Zero Transition 2031-38 Buy and Maintain Fund
CT Net Zero Transition 2039-46 Buy and Maintain Fund
CT Net Zero Transition Low Duration Credit
A short-dated global credit strategy with a formal commitment to net zero by 2050.
CT Net Zero Transition 2039-46 Buy and Maintain Fund
Get in touch
Important information:
FOR PROFESSIONAL INVESTORS ONLY (not to be used with/passed on to any third party). For marketing purposes.
Your capital is at risk. This material should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness. Actual investment parameters are agreed and set out in the prospectus or formal investment management agreement.
In the UK: Issued by Threadneedle Asset Management Limited, No. 573204 and/or Columbia Threadneedle Management Limited, No. 517895, both registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.
© Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
