Monthly commentary Pareto ESG Global Corporate Bond
Policy uncertainties following the upcoming U.S. election also fuels the increase in Treasury yields. A potential Trump win would open the door to even larger US fiscal deficits, from an already record-high level today. Together with a policy on lower taxes and broad-based tariffs, a Trump win is expected to be inflationary and could push the Fed to cut rates at an even slower pace.
European treasury yields also rose in October, although not as sharply as in the U.S.
In October, we participated in SAUR’s new issuance of a €550 million Blue Bond, becoming the first French corporate and European water infrastructure entity to utilise this type of instrument for funding water projects. The proceeds will support initiatives aimed at protecting and restoring water resources. While we remain cautious about blue and green bonds due to greenwashing concerns, we believe in SAUR’s commitment to delivering meaningful environmental impact as a dedicated player in the water utility sector. During the month the fund also participated in the issuance of SEB’s new $500 million AT1 bond.
In the secondary market the fund sold off the positions in Grupo Antolin, Kion Group, Prologis, EQT and Ericsson. All holdings were considered non-core in terms of rating, yield, or position size.
Fund performance was slightly negative in October, in line with global high-yield indexes.
Portfolio management team
Philip Lindgren
Portfolio manager
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