Neuberger Berman and UBS remodel Global High Yield Fund for UN SDGs

Published on: 09 June 2022
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In collaboration with UBS Global Wealth Management, Neuberger Berman, a private, independent, employee-owned investment manager, has reframed its existing global high yield fund (GWM). The enhanced UCITS fund will invest globally in high yield bonds with the primary goal of engaging systematically with issuers on objectives related to the United Nations Sustainable Development Goals.

The fund has been renamed the Neuberger Berman Global High Yield SDG Engagement Fund, and it will be available exclusively to UBS clients in Switzerland and other select international markets for the next six months before opening to all eligible global investors (ex US).

Chris Kocinski, Joseph Lind, Jennifer Gorgoll, and Simon Matthews make up the fund's management team. They are supported by 37 non-investment grade analysts, Neuberger's extensive global fixed income platform, and the firm's 14-person ESG Investing team, led by Jonathan Bailey.

The fund will work with all issuers on goals that are aligned with contributions to the UN SDGs. It will provide regular updates on engagement progress by sharing case studies and key performance indicators relating to the issuers' products, services, operations, or processes in order to track progress toward the goal of positive environmental and/or social outcomes. The NB ESG Quotient will also be used in the fund's proprietary ESG assessments. The fund seeks to maximise current income while preserving capital by investing in securities in the global high yield fixed income market that aim to generate investment returns while also supporting better alignment with the UN SDGs.

Kocinski, senior portfolio manager at Neuberger Berman, says: “We are intentionally seeking to maintain yield and total return characteristics of a traditional high yield product while also pursuing a robust sustainability objective through active engagement.”

Lind, senior portfolio manager at Neuberger Berman, says: “For us, delivering yield and solid returns whilst working with and investing in companies aiming to end poverty, improve health and education, reduce inequality, tackle climate change and spur economic growth are not mutually exclusive.”

Bruno Marxer, Head Global Investment Management at UBS Global Wealth Management, comments: "The collaborative effort behind this new launch speaks to our ambition to provide our clients with exclusive access to solutions from leading partners, in this case enabling them to position for current market trends while helping to drive positive social and environmental change."

Jose Cosio, head of global intermediary (ex US) at Neuberger Berman, adds: “We thank UBS for partnering with us to launch this innovative fund. Neuberger Berman is well-positioned to thrive in this space – with advice and oversight from our established ESG Investing team, engagement activities are led by the investment team who has superior access to senior company executives. We are leaders within the ESG space, having been awarded an A+ in every eligible category for our approach to ESG integration across asset classes by the UN-backed Principles for Responsible Investment (PRI) report."

“Neuberger Berman and UBS have co-innovated the strategy over the past few months and we are confident it will be attractive to investors. Investors prefer not to give up yield or total return but still want to drive forward their sustainable objectives within their portfolios. We believe that Neuberger Berman Global High Yield SDG Engagement Fund is going to be the best mix of the two.”

Effective 6 April 2022, the fund name was changed from Neuberger Berman Global High Yield Bond Fund to Neuberger Berman Global High Yield SDG Engagement Fund. The investment approach and investment objective were modified to reflect engagement with 100% of corporate issuers on the United Nations Sustainable Development Goals. Since inception on 4 August 2016 to 6 April 2022, the Fund was managed without a formal sustainability objective, although it did promote environmental and social characteristics and apply exclusions into its investment process and engagement approach. The change in investment approach and investment objective may have an impact on the fund’s performance.

Source: UBS news

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