Selwood ESG Credit

The Selwood ESG Credit fund seeks a diversified ESG exposure to European Investment Grade credit. It implements the strategy by investing in the iTraxx MSCI ESG Screened Europe Index “on the run” (long 5x) and actively managing the fund's exposure and mark to market by being short the iTraxx Main Europe Index (0 to 5x). The fund's net exposure is subject to changes based on the prevailing market dynamics (2.8x on average), with the team’s investment decisions guided by in-house quantitative indicators, including options replicating portfolios, momentum indicators, machine learning techniques, etc. While the investment process is largely systematic, signals need to be validated and can be overridden by the investment team (located in Paris). In addition to the core CDS strategy, the portfolio’s unencumbered cash (c. 80%) will be invested in EUR duration-hedged Green Government Bonds with a focus on core European countries. These Green Government Bonds are long-term and sustainable investments that contribute to the following indicative goals: climate change mitigation, climate change adaptation, and pollution prevention. In current market conditions, the fund targets a return of 8-10% p.a. with a Sharpe above 1.