3 Highly Rated ESG Bond Funds: Morningstar

2. Pimco Enhanced Short Maturity Active ESG ETF (EMNT)

Analyst rating: Gold

YTD performance: 0.22%

The fund shares a team and resources with the non-ESG Pimco Enhanced Short Maturity Active ETF (MINT). It applies a similarly strong process focused on capital preservation while using the firm’s sustainable investing framework.

This ultrashort bond strategy emphasizes issuers with improving to exemplary ESG practices and to avoid those with deteriorating to harmful ESG traits. There are no set allocation targets.

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1. Pimco Total Return ESG (PTSAX)

Analyst rating: Gold

YTD performance: 1.05%

The fund offers the same management team and process of its conventional sibling Pimco Total Return (PTTRX), only with an ESG emphasis.

The strategy, which has long applied certain exclusionary screen to its portfolio construction, should appeal to investors who want a core-plus bond fund that also supports favorable ESG outcomes, Morningstar said. Pimco’s customized ESG scoring for different market sectors is most evident in the portfolio’s corporate allocation, which skews toward higher quality compared with the firm’s standard portfolios.

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