About the Strategy
We are pleased to announce the launch of a new strategy, RP Broad Corporate Bond (Fossil Fuel Exclusion) - designed in partnership with University of Toronto Asset Management Corporation (UTAM),
and in collaboration with FTSE Russell. This new actively managed strategy aims to outperform the FTSE Canada All Corporate Ex Fossil Fuels Enhanced Bond Index by 100 bps (net of fees) on an annualized basis. The strategy merges our long-standing investment process with a
transparent, rules-based approach to screening fossil fuel exposure out of the portfolio.
Working Together With Our Investors
We pride ourselves on our credit expertise and our ability to design thoughtful fixed income solutions. We leverage our expertise to collaborate closely with institutional investors in developing several of our strategies to ensure that the portfolio mandate aligns with their goals.
This new strategy is an example of how we can collaborate with our clients, including the
University of Toronto - a long-standing RPIA client - and its investment manager, UTAM, to develop solutions that align with their long-term investment and ESG objectives.
Leon Lu, Head of Fixed Income, UTAM comments:
We actively seek to identify strategies that can meet the University of Toronto’s carbon reduction goals. This new collaboration with RPIA builds on our longstanding and mutually beneficial relationship – and this new fossil fuel exclusion
strategy helps us fulfill the University’s climate objectives.
The First-Of-Its-Kind Approach in Canadian Fixed Income
We worked alongside FTSE Russell on this first-of-its-kind transparent, rules-based approach to screening issuer-level fossil fuel exposure out of the “traditional” FTSE Canada All Corporate Bond Index. The index series
is designed to enable more options for those seeking to calibrate their exposure to fossil fuels with a thorough and rigorous exclusion approach across the value chain. The FTSE Canada All Corporate Ex Fossil Fuels Enhanced Bond Index adds three screens to the
A baseline exclusion to remove “controversial conduct and product” issuers involved in controversial weapons, tobacco, thermal coal extraction, and UN Global Compact Principles controversies.
Removal of four industry sub-sectors using the FTSE Canada schema: Energy Distribution, Energy Exploration, Energy Integrated, and Energy Pipeline.
Screen issuers that belong to the TRBC sectors with fossil fuel-related exposure and those that Sustainalytics identifies as having direct involvement or significant ownership in the following revenue categories:
oil & gas, oil sands, Arctic oil & gas exploration, shale energy, and thermal coal.
Marina Mets, Head of Americas, Fixed Income and Multi-Asset Index Product Management, FTSE Russell comments:
We’re delighted to announce the launch of the new FTSE Canada Universe Ex Fossil Fuels Bond Index Series, bringing further transparency across fixed income, through
its in-depth rules-based screening approach. With rising investor needs for greater choice when it comes to managing fossil fuel exposure in portfolios, this first-of-its-kind Canadian index, enables today’s climate-conscious investors to align their investment strategy, financial interests, and values.
As the market environment continues to evolve in response to economic and social changes, investors need solutions that can cater to their unique long-term investment goals and address the challenges they seek to overcome. We believe that partnering with our investors and other industry stakeholders can help bridge that gap between what is available and what is needed for investors to achieve their goals.