M&G Investments has launched the M&G Emerging Markets Corporate ESG Bond Fund, a Luxembourg-domiciled Sicav investing in emerging market corporates bonds, with a focus on Environmental, Social and Governance (ESG) characteristics.
The fund will be managed by Charles de Quinsonas and supported by head of emerging market debt Claudia Calich.
The investment strategy will take an active, high-conviction approach based on an in-depth analysis of corporate bonds, as well as an evaluation of the risks associated with the respective countries, the group said.
The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the global corporate emerging markets bond over any three-year period.
The JPM CEMBI Broad Diversified Index is a point of reference against which the performance of the fund may be measured.
At least 80% of the fund will be invested in debt securities issued by companies, including those backed or owned by governments, in emerging markets. The Fund will predominantly invest in USD denominated bonds but offers hedged share classes for investors who want to hedge the USD risk.
ESG criteria are assessed as part of the credit analysis of bond issuers, and act as an additional filter to the fund’s exclusion policies.
Fund manager Charles de Quinsonas said: “The EM corporate bond market has seen rapid growth over the past fifteen years, driven by the strong economic expansion across developing economies. But we believe it remains an under-researched market, creating a wealth of opportunities for active credit selectors.”