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Pimco holds high regional hopes for new climate fund

Pimco's new bond fund for European investors invests in both labeled and unlabeled green bonds. The fixed income specialist's head of Nordics and Benelux Patrick Dunnewolt believes the fund will be of great interest to Nordic investors.

Patrick Dunnewolt, Head of Nordic and Benelux at Pimco. Photo: PR / PIMCO

The US asset manager Pimco started off October by launching the fund GIS Climate Bond Fund. The UCITS fund is dedicated to investments linked with combating global climate change. This can happen through investments in labeled and unlabeled green bonds, and in bonds from issuers who demonstrate "innovative approaches" to environmental sustainability.

According to Patrick Dunnewolt, the company head of the Nordics and Benelux, the Pimco climate bond fund emphasizes investments that are more strategic in nature, which will allow investors to address the long-term dynamics of climate change.

"We believe this will be of great interest to investors in the Nordics who want to invest in a fund that will help finance climate action projects," he tells AMWatch.

Climate change will likely be a disruptive force in the global economy in the very long term given the impact on human lives, economic activity and financial markets, Dunnewolt adds.

Last week, Pimco published its 3-5 year outlook on the global economy and financial markets. One of the of the key findings in the report was that investors should expect near-zero yields with monetary policy rates in the most advanced economies to stay at a low point, or perhaps even go lower, for most of or all of the next three to five years.

"We view negative rates as a desperate tool with adverse side effects that become larger the longer rates stay negative. However, with bond yields already low or negative and yield curves flat, more central banks are likely to venture into negative (or more deeply negative) territory in response to future adverse shocks, along with further purchases across a wide spectrum of financial assets," Pimco writes.

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English Edit: Nielsine Nielsen

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