The Neuberger Berman Sustainable Asia High Yield Fund is benchmarked against the JPMorgan JESG Jaci High Yield Index, and the strategy will invest in high yielding, quality-biased Asian credit opportunities displaying strong sustainability profiles, according to the firm.
The fund, which is a Dublin-domiciled Ucits, is available to professional investors in Hong Kong and Singapore, and will be managed by Nish Popat based in London, Sean Jutahkiti and Prashant Singh, both based in Singapore.
The trio also oversee the group’s Asian Debt – Hard Currency Fund. The managers will be supported by the firm’s multi-site emerging markets debt (EMD) team – which includes 15 investment professionals in Singapore and Shanghai.
“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,” Popat said in a statement.
“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,” he said, adding that Asia hosts many domestic leaders in renewable energy, which will take centre stage in the fund.
In populating the Sustainable Asia High Yield portfolio, the managers analyse 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 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, according to the firm. 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.
“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,” Jose Cosio, head of intermediary of Global ex US at Neuberger Berman, said.
“With this in mind, we are well positioned to offer clients exposure to sustainable higher yielding securities from this rapidly growing part of the world,” Cosio added.
Neuberger Berman, with offices in 25 countries, manages $460bn in client assets as of 31 December, 2021