Some European ESG funds are excluding US Treasuries according to a report by Bloomberg.

They include companies such as Erste Asset Management, Berenberg Gossler and Union Investment who have dropped US Treasuries from their portfolios because of the US stance on capital punishment, climate change and nuclear weapons. This can lead to a loss of return given that 10-year Treasuries yield around 1.7%, compared with -0.47% in Germany.

The French Public Service Additional Pension Scheme has also excluded Treasuries because capital punishment is allowed in some states although it does hold US corporate debt. According to Henrik Pontzen at Union Investment, an alternative to Treasuries for investors is US mortgage bonds.