PGIM Investments launches Global Corporate ESG Bond Fund
PGIM Investments has expanded its environmental, social and governance (ESG) offering with the launch of the PGIM Global Corporate ESG Bond Fund.
This is the first of a newly created suite of ESG UCITS strategies offered to non-US investors, managed by PGIM Fixed Income, subject to regulatory approval.
PGIM Investments is the global manufacturer and fund distributor of PGIM Inc, the USD1.3 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
ESG considerations are fully integrated into all PGIM Fixed Income’s investment processes. All securities that the firm invests in across all portfolios are fully analysed with respect to their ESG aspects utilising PGIM Fixed Income’s proprietary ESG rating framework—with ratings assigned for every issuer. These ESG ratings are assigned by its team of more than 110 analysts and are overseen by its ESG committee. The new PGIM Global Corporate ESG Bond Fund is designed to emphasise higher rated ESG issuers than the traditional corporate bond portfolios.
The PGIM Global Corporate ESG Bond Fund seeks total return, comprised of current income and capital appreciation in excess of its benchmark, the Bloomberg Barclays Global Aggregate Corporate Total Return Index—while focusing on ESG principles. The Fund invests in a diversified portfolio including investment-grade and high-yield corporate bonds, and quasi-sovereign bonds globally, denominated in US dollars, euro, yen, sterling or in emerging market currencies.
It is managed by an experienced team of investment professionals from PGIM Fixed Income, led by Edward Farley, head of the European Investment Grade Corporate Bond team. Farley also manages the existing PGIM Global Corporate Bond Fund, which was launched in 2016. PGIM Fixed Income is a leading global asset manager with USD868 billion in assets under management—including USD312 billion in investment-grade corporate bonds.
Farley says: “As a fundamental research-focused manager, we fully recognise the importance of integrating ESG factors in our global investment research, decision making and portfolio management and believe that ESG issues can affect the performance of investment portfolios. Our investment approach emphasises and actively seeks to identify companies with sustainable, long-term competitive advantages. Within this context, we take into consideration governance, ethics, and overall social and environmental impacts. We consider relevant ESG factors in our investment process to work toward our ultimate fiduciary duty—searching for the highest risk adjusted returns for our clients.”
Kimberly LaPointe, head of PGIM Investments’ international business, says: “We continue to build out our cross-border funds and strategies in areas where we have core investment expertise. Increasingly we’re seeing a groundswell of interest in ESG investing from clients across the globe. While ESG is already an integral part of PGIM Fixed Income’s investment process, there are few funds in the global corporate bond category with an explicit ESG mandate. With the deep experience of PGIM Fixed Income, including industry leading corporate bond capabilities, we are pleased to launch a dedicated solution for clients seeking to increase allocations to mandates that emphasise higher rated ESG investments.”
The PGIM Global Corporate ESG Bond Fund launched on 29 June 2020 with USD25 million in assets under management. It is a sub-fund of the Irish-domiciled UCITS fund umbrella, PGIM Funds plc. It will initially be registered for sale in the UK, Denmark, Norway, Sweden, Germany, Switzerland, Austria and the Netherlands.