Investment Strategy
The Berenberg EM Bonds ESG fund invests in emerging markets government and corporate bonds, using a systematic and active investment process. It aims to achieve an appropriate and steady increase in value while applying ESG investment criteria. In addition, it adheres to strict guidelines for the exclusion of non-ESG-compliant investments. Wide-ranging sustainability aspects are also analysed and taken into account when selecting individual bonds for the portfolio. The final portfolio is also subject to ongoing risk management at country and company level.
- Active investment approach in EM government and corporate bonds with continuous consideration of ESG exclusion and inclusion criteria.
- Active positioning against a market benchmark
- Average duration is between 5 and 7 years
- Investment segments are primarily government and corporate bonds in hard currencies
Learn more about our Berenberg Fixed Income investment philosophy
Further details on the opportunities and risks of this fund can be found in the sales prospectus.
Indexed performance
Performance in 12-month periods
Currencies
Sectors
Countries
Asset classes
Top Holdings
Monthly market comment
In March, there was a marked decrease in volatility in yield movements, supported by dovish signals from the FOMC meeting, which positively influenced market sentiment. Similarly, the segments of emerging markets, both in government and corporate bonds, benefited from an improved investment climate. Like in the previous month, the high-yield (HY) government bond segment was the biggest performance driver, with a spread tightening of about 50 basis points. The risk premiums in the investment-grade (IG) government bond segment, as well as in corporate bonds, could only tighten between 7 and 11 basis points. The Berenberg EM Bonds ESG Fund was up 1% on a monthly comparison but couldn't fully keep up with the development of the benchmark since government bonds with low ratings typically present an ESG issue, thus prohibiting investment.
Portfolio Management
Consideration of ESG Elements
Identifying companies and business models that will be successful in the long term is the basis for good investment decisions. Environmental, Social and Governance (ESG) factors are key factors in decision making and are therefore integral
components of the investment process.
CO₂-Intensity
The fund does not actively manage its carbon footprint, however, emissions data such as CO2 intensity are relevant parameters which can be used to assess the efficient management of a company and the extent of transition risks.
ESG Score
The data provider MSCI ESG uses an ESG score of 0 to 10 to assess the management of material ESG risks of portfolio holdings compared to competitors.
ESG Controversies Screen
Investments in the fund are monitored for ESG controversies and, with the help of MSCI ESG data, flagged according their severity. Thereby, potential ESG risks of investments are identified. In the case of an orange flag (severe controversy), we enter into an active exchange with the company. In the case of a red flag (very severe controversy), the company is excluded.
