Agefi Luxembourg - février 2026

AGEFI Luxembourg 30 Février 2026 Fonds d’investissement ByChris IGGO, Chair of the Investment Institute and CIO forAXA IMCore, BNP ParibasAsset Management A stable economic backdrop, easing monetary policy and strong fundamentals are creating a favourable envi- ronment for European government and corpo- rate bond exchange-tra- ded funds (ETFs). Uncertainty over US tariffs has faded, after theEuropean Commission agreed a trade deal with the US in July, though there remains scope for surprises on a global scale. Elsewhere, political risk and fiscal concerns cannot be discounted – butwith the ‘tariff tantrum’ behind us, investor attention is now shifting to the broader macroeconomic environment. Thecontinent’seconomicgrowthisadmittedlymod- est, at best – Eurozone GDP rose 0.1% in the second quarter(Q2)andwasup0.2%acrossthebroaderEu- ropeanUnion,comparedtogrowthof0.6%and0.5% respectively in Q1. More positively, the latest S&P/HCOBPurchasingManagers’Indexshowed that Eurozone business activity continued to ex- pandinSeptember,withtheindexreachinga16- monthhigh. (1) MeanwhileEurozoneinflationhas remained at, or close to, the European Central Bank’s (ECB) 2% target, edging up to 2.2% in September from2.0% inAugust. The ECB has kept interest rates un- changed since June, and markets see little to no chance of another rate cut this year, with the poten- tial for a cut in mid-2026. This pause in the monetary easing cycle is beneficial for traditional ETF bond strategies, supporting yields, which tend to fall when interest rates are cut. Rising issuance and inflows Monetary easing is also underpinning a buoyant credit backdrop,making it cheaper for corporates to borrow; this is demonstrated by relatively high lev- els of corporate bond issuance and tight spreads in credit markets. At the same time, the artificial intel- ligence boom is fuelling confidence – so-called ani- mal spirits - and this isflowing into thebondmarket as well as equities. European government bond is- suance is also expected to ramp up after Germany loosened its fiscal debt rules to allow it to borrow more to funddefence spending. MeanwhiletheEuropeanCommissioniscontinuing tousedebtissuanceasawayoffundingprogrammes like NextGenerationEU. This creates potential new opportunities for ETF investors to capture yield in longer-dated bonds. In the Eurozone government bond market, longer durationhasoutperformeditsshorterdurationcoun- terpart this year and continues to remain attractive. Within credit, investment-grade bonds continue to attract strong inflows, with investors seeking yield eventhoughspreadsaretight.Thereislittleevidence of underlying credit problems as corporates and fi- nancials have reported strong earnings. Overall European investment funds – both equities and fixed income - attracted some €131bn of in- flows in the second quarter of 2025, according to Morningstar (2) . Supportedby strong fundamentals In its October 2025 Fiscal Monitor, the International MonetaryFund(IMF)warnedthatglobalpublicdebt is projected to rise above 100% of GDP by 2029(3) with a rise in government borrowing costs making bondmarkets more fragile. However, the IMF cited France and Italy as among thosewith “deepand liq- uid sovereign bondmarkets”. This underscores the fact that whether it is govern- ment or corporate bonds, not all issuers are created equal. There is increasing divergence – and oppor- tunities for diversification - across sectors andcoun- trieswithinEurope,meaningactive selectionwithin ETFs is crucial. An active approach can help seek out opportunities across the spectrumregardless of themarket environment. Aggregate portfolios give active managers the scope to manage both interest rate and credit risk to help to achieve performance. While credit fundamentals remain solid, anddefault risk is low, providing a buffer against potential eco- nomicheadwinds, uncertainties aroundgrowthand inflationmean a prudent and selective approach re- mains essential. Identifying strong fundamentals, prudent financial management, and sectoral re- silience is key to capturing long-term value for ETF fixed income investors. [1] Eurozone Composite PMI [2] European Fund Flows: 5 Key Trends inQ2 [3] Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth How a selective approach to European bonds could deliver long-term value for ETF investors ByDr. SebastiaanNiels HOOGHIEMSTRA (portrait)*& JurriaanMathijs KLAASEN** B uilding on themomentumof re- cent regulatorydevelopments, the EuropeanCommissionhas proposed a recast of the Sustainable Fi- nanceDisclosureRegulation (“SFDR 2.0”). The initiative represents a sig- nificant evolutionof the EU’s sus- tainable finance framework, replacing a disclosure-focused regimewith clearlydefinedprod- uct categories andbindingnam- ing rules. The emphasis shifts fromentity-level obligations to enhancedproduct-level trans- parency, with the use of sustain- ability-related terms in a product’s name ormarketingmaterials triggering strict com- pliance requirements. This contributionout- lines the core elements of the proposal and considers the implications for fundmanagers and theAIFs andUCITS theymanage. TheNewlyProposed SFDR2.0 Product Categories The NewCore Product Categories (Article 7, 8 and 9 Funds) The TransitionCategory (NewArticle 7) For products that claim to invest in undertakings on a measurable path toward environmental or social sustainability, at least 70%of theportfoliomust align with the stated sustainability claim, assessed using appropriate indicators. Eligible investmentsmay in- cludeentitieswithcredibletransitionplansorscience- based targets, transitional activities under the EU Taxonomy,strategiesalignedwithClimateTransition Benchmarks (“ CTB ”), Paris-Aligned Benchmarks (“ PAB ”), or portfolios where at least 15% of invest- ments are Taxonomy-aligned. These products must also comply with CTB/PAB-style exclusions and must exclude investments in companies developing newprojects linked tohard coal and lignite, oil fuels, or gaseous fuels. For hard coal or ignite power gen- eration, the exclusion also applies where the com- pany has no phase-out plan. Finally, products must identify the PAIs associated with their investments and describe the measures taken to address them. The ESGBasics Category (NewArticle 8) For products that integrate sustainability factors be- yondriskmanagementthroughrobustESGmethod- ologies, such as outperformance on defined sustainability indicators or best-in-class approaches, yetdonotqualifyasTransitionorSustainable,atleast 70% of investments must align with the stated sus- tainability claim using appropriate indicators. Eligible investments include those selected for their strong performance on specified ESG metrics or through credible best-in-class or equivalent approaches. These productsmust alsocomplywiththebaselineCTB/PABexclu- sions. Unlike the other categories, ESG Basics products are not required to report PAIs. TheSustainableCategory(NewArticle9) Forproductsthatclaimtoinvest in sustainable undertakings, sustainableeconomicactivities, or other assets that contribute to sustainability, at least 70% of investments must align with the stated sustainability claim, assessed through ap- propriate indicators. Eligible investments include assets that are already sustainable or contribute meaningfullytosustainability,suchasEUTaxonomy- alignedactivities(atleast15%),PAB-alignedstrategies, EU Green Bonds, EuSEFs, or instruments issued under EU-backed fundingprogrammes. These products must also comply with CTB/PAB- style exclusions and must exclude investments in companies developing new projects linked to hard coal and lignite, oil fuels, or gaseous fuels. For hard coalorignitepowergeneration,theexclusionalsoap- plieswhere the companyhas nophase-out plan. Finally, Sustainable products must identify and dis- close the PAIs of their investments and explain the measures taken toaddress them. Theymaymeet this requirement in full or in part by using appropriate sustainability-related indicators. Impact Products FundsfallingunderArticle 7orArticle 9thatpursue apredefined,measurableenvironmentalorsocialim- pact objectivemayqualifyas sustainability-relatedfi- nancial products with impact under SFDR 2.0, effectively, an “impact fund.” For such products, SFDR 2.0 requires additional impact-specific disclo- sures (maximumone page). Products investing in other Categorized Products (Article 9a) SFDR 2.0 introduces anewArticle 9a, establishinga regime for products that invest inor combine catego- rized products, including fund-of-funds and similar structures.Productsmayqualifyforacategoryifthey invest at least 70%of their assets in categorizedprod- ucts andmeet the relevant exclusions, relying ondis- closures from the underlying products rather than applyingfulllook-through.Whereaproductdoesnot fully meet a category’s criteria, managers must dis- closetheallocationofinvestmentsbycategoryandex- plain the approach and exclusions applied to the uncategorized portion. In addition, certain non-cate- gorized products that invest in categorized products mayreferencesustainabilityaspectsintheirmarketing communications,thoughnotintheirname,provided such statements are fair, clear, and fully alignedwith the product’s disclosed composition and investment approach. NewPre-contractual, Periodic and WebsiteDisclosures under SFDR2.0 Disclosures under SFDR 2.0 are redesigned to be shorter (maximum two pages), more comparable, and focused on information that is genuinely rele- vant for investment decision-making. Pre-contrac- tual disclosures must clearly set out the product category, objective and strategy, binding elements andexclusions, the indicators chosen to substantiate the 70%minimum threshold, data sources and use of estimates, and, where relevant, any reference to the EU Taxonomy or climate benchmarks. Where an index isused, theproductmust alsodemonstrate alignment andmethodological consistency. Website disclosures are significantly streamlined and must cross-reference the pre-contractual and periodic disclosures, while also providing informa- tion on any ESG ratings used. Periodicdisclosuresmust explainwhether theprod- uct has achieved its category-specific objectiveusing the selected indicators and provide clear reasoning for any shortfalls ormethodological ordata changes. Where applicable, theymust alsodemonstrate com- pliancewith exclusions and theminimumportfolio coverage. Marketing andProductNameRules Onlycategorizedproductsmay,underSFDR 2.0,use sustainability-relatedtermsintheirnamesormarket- ing materials, and only in a manner consistent with the category’s criteria and binding commitments. Funds that currently comply with ESMA’s fund- name guidelines will therefore need to reassess any ESG-relatedterminologyagainstthestricterSFDR 2.0 standards.Notably,theuseof“impact”inaproduct’s name will be reserved exclusively for Transition or Sustainable products that pursue a predefined, mea- surable environmental or social impact objective. Across all disclosures andmarketingmaterials, any ESG-related statements must be fair, clear, not mis- leading, and fullyalignedwith the applicableprod- uct category. Non-categorizedProducts (Article 6a) TheproposalintroducesanewArticle 6a,whichim- poses specific transparency restrictions on non-cate- gorized products following the creation of defined categoriesforsustainability-relatedfinancialproducts. To safeguard investors, these products may still ex- plain whether and how they consider sustainability factors in their pre-contractual and periodic disclo- sures, but such informationmust not be a central ele- ment and is capped at 10% of the space used to describe the strategy. These references must also be excluded from the PRIIPs KID andmay not amount to sustainability-related claims reserved for catego- rized products. In addition, Article 6a products are prohibited fromusing sustainability-related terms in theirnamesormarketingcommunications.Theexist- ingArticle 6requirementsonintegratingsustainabil- ity risks continue to apply to all products, with an explanationrequiredwheresuchrisksareconsidered not relevant. The FullyRaisedClosed-Ended Funds Exemption The SFDR 2.0draft proposal includes anexemption for fully raised closed-ended funds. Existing closed- endedfundsthatarenolongerbeingmarketedwhen thenewrulestakeeffectmayoptoutoftheSFDR 2.0 framework,meaningthatmanagerswouldnotbere- quiredtotransitionthoseproductstothenewregime. It remains unclear, however, whether such funds would still be required to comply with the existing SFDR 1.0 rules. For all other funds, open-ended funds and closed-ended funds that are not fully raised by the time SFDR 2.0 becomes applicable, no transitional regime is provided. These products will need to comply with the new framework from the date it takes effect. Other Changes under SFDR2.0 SFDR2.0introducesseveraladditionalchanges.First, the existing definition of “sustainable investments” is removed, which also eliminates the DNSH and standalone good-governance tests. This shift is likely to place greater emphasis on Taxonomy alignment forproductsusingenvironmentalclaims.Entity-level PAIreportingisalsodeleted,althoughTransitionand SustainableproductsmuststilldisclosePAIsatprod- uct level. Firms will no longer need to include sus- tainability-risk considerations in remuneration policies,norwillTaxonomyreportingberequiredun- less a product relies on it. Portfolio managers and advisers fall largely outside the scope of SFDR 2.0, meaning many SMAs and funds-of-one may sit outside the framework unless structuredasanAIF.Newrulesalsoclarifyhowfirms may use external data and internal estimates: data- provider arrangements must be documented, and firmsmustmaintain clearmethodologies for any es- timates used, with this information provided to clients on request. The SFDR2.0 ImplementationTimeline The timing for SFDR 2.0 remains uncertain and de- pendsonhowquicklytheCouncilandParliamentcan agree to the proposal. Once adopted, the new rules would generally take effect 18 months after publica- tionintheOfficialJournal,meaningtheframeworkis unlikely to apply beforemid-2028. (*)Dr.SebastiaanNielsHooghiemstra isaseniorassociateinthein- vestment management practice group of Loyens & Loeff Luxembourg andSeniorFellowoftheInternationalCenterforFinancialLaw&Gov- ernanceattheErasmusUniversityRotterdam. (**)JurriaanMathijsKlaasen isanassociateintheinvestmentman- agementpracticegroupofLoyens&LoeffAmsterdam. The SFDR 2.0 Proposal: From ESG Disclosure to a Product-Label Regime