UBS Asset Management has filed initial prospectuses with the US Securities and Exchange Commission (SEC) for two new sustainable investing mutual funds, the UBS Engage For Impact Fund and UBS Sustainable Development Bank Bond Fund.

The new UBS Sustainable Development Bank Bond Fund will enable UBS Global Wealth Management's US private clients to invest in a diversified portfolio of World Bank and other development bank debt, both standalone and as part of UBS GWM's new 100% sustainable portfolio, according to a UBS spokesperson.

"The new funds underscore UBS's firm-wide commitment to sustainable investing, a strategic decision to bring sustainable investing into the mainstream and fulfill our clients' needs in this area," said the official.

Investments for the funds will be based on available supply and liquidity parameters including evaluating amounts outstanding, available dealer inventory, and volumes traded in the secondary market. The funds will be managed relative to their secondary index, which is a blend of two market indices designed to measure the performance of the US dollar denominated multilateral development bank bond market. The fund's secondary index is comprised of 60% Solactive UBS Global Multilateral Development Bank Bond USD 5-10 Year Total Return Index and 40% Solactive UBS Global Multilateral Development Bank Bond USD 1-5 Year Total Return Index.

"This helps the World Bank and other development banks open up innovative funding streams from private clients," said the official. "It also helps further the cause of the indices as a useful new piece of infrastructure for the development bank bond market."

The fund may engage in derivatives transactions involving futures, forward currency agreements, call and put options, and equity participation notes for risk management purposes and to gain market exposure on its uninvested cash.

Both funds will be available to UBS Wealth Management USA clients and also form unique components of UBS WM USA's new fully sustainable cross-asset portfolios, said the UBS official. "As a reference point for its allocations, the UBS Sustainable Development Bank Bond Fund would also use UBS's new development bank bond indices, launched in partnership with Solactive this year," he said.

The funds expand UBS Asset Management's existing US lineup of sustainable mutual funds and private client separately managed account strategies. The launch comes almost two years after the Swiss bank licensed the Dow Jones Sustainability Europe Diversified High Beta High Dividend Index as the underlying for a series of index-linked products marketed in Europe.

Solactive has been notably active in the sustainable investment market, and has licensed a number of sustainable and ethical indices to structured products providers such as Commerzbank and BNP Paribas.

Click in the link to see the new UBS funds' SEC filling.

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