The Responsible Horizons Euro Corporate Bond Fund has secured the ESG fixed income fund of the year, Europe award after impressing judges with its use of in-house ESG ratings, extensive company engagement and consistent performance track record.

The €923 million fund – which has been the flagship sustainable fund at Insight Investment since it was launched in 2017 – has used the proprietary Prime ESG ratings to assess investments since they were launched in 2019, after finding existing data provider ratings inadequate.

Fund co-manager Lutz Engberding told Environmental Finance that Prime ESG effectively "curates" the underlying data inputs from various ESG data providers – which often do not agree with one another – by removing outliers and considers any data that appear inaccurate or incomplete in order to create their own "data infrastructure".

Engberding said this has helped it identify ESG risks that one data provider by itself may not have noticed, but the picture becomes clearer when combined with others. This has resulted in the fund avoiding some high-profile controversies, including the insolvency of Wirecard in 2020. The German payments firm was avoided due to a poor Prime ESG governance rating, which contrasted with more favourable governance ratings from third-party ESG ratings firms.

On top of this, however, the fund makes extensive use of engagement with companies to improve ESG performance. During 2020, the fund undertook more than 1,200 issuer engagements of which nine out of ten involved ESG-related discussions.

Nor has this ESG focus harmed performance. The fund has outperformed its benchmark in every year since it was launched, most recently delivering a 4.41% return in 2020 compared to the 2.77% of the Bloomberg Barclays Euro Aggregate Corporate Index.