Sustainable Fixed Income Investing at M&G

15 min read 11 Aug 22

Please find below a note covering our enhanced range of sustainable fixed income strategies. The funds cover the key fixed income asset classes across investment grade, high yield, emerging market debt and flexible bond investing.

  • Our sustainable fixed income range covers the key sub-asset classes and is designed to provide clients with a suite of core sustainable fixed income solutions, encompassing investment grade, high yield and emerging market bonds. We also offer a flexible sustainable bond strategy, where the fund managers are able to invest across the fixed income spectrum and to adjust portfolio positioning at different phases of the economic cycle.
  • Across this range, our investment approach is designed to maximise sustainability outcomes, while maintaining our value-based and dynamic investment style.

  • Once the sustainability-themed universe has been defined through screening, the fund managers can begin the process of portfolio construction, carefully balancing financial objectives with sustainability outcomes. Subject to valuations, the fund managers seek to maximise the sustainability credentials of their funds. This could be reflected through a number of metrics, such as higher average ESG scores, lower weighted average carbon intensity (WACI) or through an increased allocation to ESG-themed bonds, such as Green Bonds, Social Bonds or Sustainable Bonds.

  • Enabling lower carbon intensity is a key part of our investment approach across the sustainable fixed income fund range. Each of the funds seeks to maintain a lower weighted average carbon intensity (WACI) (Scope 1+2 carbon emissions divided by US$ revenues) compared to its investment universe. This commitment is continuously monitored as one of our Sustainability Indicators, allowing us to evidence enhanced sustainability outcomes at a portfolio level.

  • Across our sustainable bond fund range, the fund managers will look for opportunities to expand their allocation to attractively priced ESG-themed bonds. As a rapidly growing market, we believe these instruments will provide a means for bond investors to make a positive contribution in tackling environmental or social challenges, whilst simultaneously helping to generate attractive financial returns for our clients.

Please read full note here

By M&G Public Fixed Income

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

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