Neuberger Berman, a private, independent, employee-owned investment manager, is expanding its successful emerging market debt (EMD) offering with the launch of the Dublin-domiciled UCITS Neuberger Berman Sustainable Asia High Yield Fund.
Benchmarked against the JPMorgan JESG JACI High Yield Index, the strategy will invest in high yielding, quality-biased Asian credit opportunities displaying strong sustainability profiles.
The Neuberger Berman Sustainable Asia High Yield Fund will be run by portfolio managers Nish Popat (pictured) based in London, Sean Jutahkiti and Prashant Singh, both based in Singapore. They also oversee the group’s Asian Debt – Hard Currency Fund. The managers will be supported by Neuberger Berman’s experienced multi-site EMD team – which includes 15 on-the-ground investment professionals in Singapore and Shanghai.
In populating the Sustainable Asia High Yield portfolio, the managers analyse environmental, social and governance (ESG) factors, while looking to identify businesses leveraging technology to provide solutions for a low carbon future – including domestic leaders in renewable energy. Overall, the portfolio aims to have a carbon intensity 30% lower than the broader Asian high yield universe.
The team will proactively engage with corporate issuers to encourage improvements in ESG profiles, while sovereign engagement is focused on the UN’s Sustainable Development Goals and Guiding Principles of Business and Human Rights. Corporate issuers within the bottom decile of Neuberger Berman’s ESG rankings are excluded from investment, while sovereign issuers with weak ESG profiles are also omitted.
Nish Popat comments: “Asia forms a large and resilient part of the global economy and is now one of the largest bond markets in the world. Yet, sustainable investing all too often stops at the border to the emerging world. We believe EMD investors have an important role in promoting sustainability, as emerging countries contain about 80% of the world’s population, contribute towards 60% of its GDP and generate two-thirds of its carbon emissions.
“Ignoring sustainability in EMD is simply no longer sustainable. Asia hosts many domestic leaders in renewable energy, which will take centre stage in the fund.”
Jose Cosio, Head of Intermediary – Global ex US at Neuberger Berman, adds: “In order to significantly reduce carbon emissions globally, targeted investment across Asia will be necessary to ensure substantial progress is made. This requires a more active, engaged, and forward-looking approach to achieve genuine sustainable investing, whilst meeting the needs of the region.
“With this in mind, and drawing on the success of the Neuberger Berman Asia Debt – Hard Currency Fund and our established, long-term track record of investing in Asian bonds, we are well positioned to offer clients exposure to sustainable higher yielding securities from this rapidly growing part of the world.”
Investing in the fund is subject to risk, including currency, emerging markets, credit, interest rate, derivatives, concentration, sustainable, liquidity, market, operational and counterparty risk. There can be no assurance or guarantee that the fund’s objectives will be achieved or that investors will receive any return on their investments in the fund.