Nikko Asset Management (Nikko AM) World Bank green bond funds have raised almost £400 million in its first year from institutional investors in Europe and the Middle East, as well as Japanese investors.

The Luxembourg-domiciled fund has returned 11.60% in its first 12 months (annualised as at 28 February 2011) versus the benchmark return of 9.68% supported by conservative currency positioning.

Launched in February 2010, the UCITS-III Nikko AM has stated that its World Bank Green Fund is the first fund of its kind to invest up to 100% of its portfolio in green bonds issued by the World Bank. The fund is currently available in Sterling and US Dollar share classes.

The fund is actively managed by senior portfolio manager Justin Eeles alongside Stuart Kinnersley, Nikko’s European chief investment officer. The investment team manages a diversified portfolio which invests 50/50 in developed and emerging markets. All proceeds of the green bonds support World Bank funded projects designed to tackle the causes and consequences of climate change in the developing world.

Kinnersley said: “We believe as the composition of global economy changes, investors should have exposure outside of the ‘G3’ currencies, especially with emerging market currencies growing in strength. High running yields, together with strong positive fundamentals are a powerful combination for generating returns.”

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