TargetNetZero IG fixed income: rethink net zero

TargetNetZero Global & Europe Investment Grade Corporate

Accelerate decarbonisation with our fixed income portfolios.

At Lombard Odier, we have developed pioneering strategies to form a fixed income universe ready for the fight against global warming.

Our TargetNetZero fixed income funds have a wide range of climate objectives covering the risk of transition, the opportunities and the physical risks associated with climate change.

Portfolios include both issuers already targeting net zero CO2 emissions by 2050, as well as those without such targets but who may be brought into line through regulatory action, investor engagement and market changes.


TargetNetZero: Decarbonise, diversify, and drive the transition through our net-zero transition process


  1. Baseline footprint

Assess the level of carbon emissions and level of carbon risk in portfolios today across both direct and indirect emissions.


2.  Current emissions trajectory

Assess not only the current emissions of a company or portfolio, but also their expected trajectory and the necessary level of decarbonisation the company must achieve.


3. Potential for acceleration

Consider the evolution of internal, industry and regulatory pressure that may lead a company to accelerate its climate commitments.


4. Leverage new information

From new company and government commitments to new carbon data received, we continually re-assess our views of the trends across the wider economy and the investable universe to implement appropriate portfolio adjustments.

Source: LOIM. For illustrative purposes only. 


Why invest?


Aligning to the climate transition, the decarbonisation imperative is yet to be fully reflected in credit markets.

Carbon footprints alone do not tell us the full picture of climate risks in a portfolio. We believe that maintaining a diversified portfolio that identifies companies on a strong decarbonisation path, irrespective of sector, will help accelerate the transition to net zero and provide compelling returns for investors.
~ Hubert Keller, Senior Managing Partner of Lombard Odier

Inescapable Net Zero Momentum:

The transition to net zero will influence the behaviour of issuers and investors.
Some sectors will find the transition  to Net Zero easier than others. TargetNetZero is already positioned with companies committed to meet the Paris Agreement and thus has a reduced transition risk.
High emission companies with a clear decarbonisation strategy may offer return opportunities missed by low-carbon strategies.

Access to potential higher yielding opportunities: 

The sustainability lens provides greater confidence in the assessment of issuers to separate the winners from the losers and invest in potential higher-yielding issues to enhance returns.
Issuers with high emissions but no clear decarbonisation strategy may find their business model compromised with increased credit risk.
Our TargetNetZero fixed income funds aim to deliver a higher potential return than the benchmark2 with lower emissions across all scopes, while decarbonising at a faster rate.

Compared to our peers, at Lombard Odier Investment Managers, we aim to deliver on three parameters: 


Redeployment of capital Rising awareness Market forces
TNZ-redeployment.png TNZ-awareness.png TNZ-market-forces.png

Reducing the transition risk for investors.
Thus aiming to generate better risk-adjusted returns as our global economy shifts from

Offering an investment opportunity in line with the climate goal to limit greenhouses
gases and consumer demand.

New targets and regulations are increasingly focused on circularity, nature, equality and net-zero.
Technological innovation and economies of scale are driving down
the costs CLICTM solutions4.

1 Source: For illustrative purposes only. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk. 2 Bloomberg Barclays Global Aggregate Corporates for the sub-fund TargetNetZero Global IG & Bloomberg Barclays Euro Aggregate Corporates for the sub-fund TargetNetZero Euro IG respectively. No benchmark/index is directly comparable to the investment objectives, strategy or universe of a fund. 3 ‘WILD’: Wasteful, Idle, Lopsided, Dirty. CLICTM: Circular, Lean, Inclusive, Clean economic model.
4 UNPRI report as at September 2019. There can be no assurance that the investment objective will be achieved or that there will be a return on capital or that a substantial loss will not be incurred.


Investment philosophy and process.

At Lombard Odier Investment Managers, we understand the transitions unfolding across our society and economy. 

Our investment philosophy: 
Utilising our fundamental credit expertise to identify value in decarbonising companies.

TNZ FI RTI table-01.svgSource: LOIM analysis. For illustrative purpose only. Sustainable Investment Research Strategy & Stewardship (SIRSS) and Environment, Social and Governance (ESG) are LOIM’s transversal sustainability teams. 1 “Ice cubes” that are significantly reducing global warming. 2 “Burning logs” that are significantly increasing global warming. There can be no assurance that investment objectives will be achieved or that there will be a return on capital.



The investment team

LOcom-AuthorsAM-Zufferey.png Yannik Zufferey
Head of Fixed Income
Ashton Parker
Head of Fundamental Fixed Income Credit Research and Senior Portfolio Manager
locomauthorsam-collet (LOcom_AuthorsAM-Collet)
Jérôme Collet
Head of Beta Portfolio Manager

Erika Wrangeård
Portfolio Manager Sustainability Specialist


Sustainable Investment Research, Strategy & Stewardship team (SIRSS)

Maxime Perrin
Head of Sustainable Investment
Dr Thomas Hohne-Sparborth, PhD
Head of Sustainability Research

+17 sustainability experts and sector analyst.

Source: LOIM. For illustrative purposes only.

Important information.

Lombard Odier Funds (hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV). The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). This marketing document relates to “TargetNetZero Europe Equity and TargetNetZero Global Equity,” Sub-Funds of Lombard Odier Funds (hereinafter the “Sub-Fund”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxem-bourg, Grand Duchy of Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds (“AIFs”) and other regulated funds, collective investment vehicles or other investment vehicles, as well as theoering of portfolio management and investment advisory services. This marketing communication was prepared by Lombard Odier Asset Management (Europe) Limited. The prospectus, the articles of incorporation, the Key Investor Information Documents, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Sub-Fund’s shares (the “Offering Documents”). The Offering Documents are available in English, French, German and Italian at and can be requested free of charge at the registered office of the Sub-Fund in Luxembourg: 291 route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg. The information contained in this marketing communication does not take into account any individual’s specific circumstances, objectives or needs and does not constitute research or that any investment strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal investment advice to any investor. This marketing communication is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Sub-Fund, an investor should read the entire Offering Documents, and in particular the risk factors, costs and conditions pertaining to an investment in the Sub-Fund. We would like to draw the investor’s attention toward the long- term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of the investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Sub-Fund and the volatility of its Net Asset Value. Investors should take care to assess the suitability of such investment to his/her particular risk profile and circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital. Past performance is not a reliable indicator of future results. Where the Sub-Fund is denominated in a currency other than an investor’s base currency, changes in the rate of exchange may have an adverse effect on price and income. Please take note of the risk factors. Any benchmarks/ indices cited herein are provided for information purposes only. No benchmark/ index is directly comparable to the investment objectives, strategy or universe of a Sub-Fund. The performance of a benchmark shall not be indicative of past or future performance of any Sub-Fund. It should not be assumed that the relevant Sub-Fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such Sub-Fund’s returns and any index returns. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/ risk. 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You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel: (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: France – Centralising agent: CACEIS Bank. Germany – German Information and Paying agent: DekaBank Deutsche Girozentrale. Italy – Paying agents: Société Générale Securities Services S.p.A., State Street Bank International GmbH – Succursale Italia, Banca Sella Holding S.p.A., Allfunds Bank S.A.U., Milan Branch, BNP Paribas Securities Services, CACEIS Bank, Italy Branch. Liechtenstein – Paying agent: LGT Bank AG. 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