M&G Launches Two Sustainable Credit Strategies

22 October 2021

New funds to be sustainable versions of flagship M&G European Credit Investment and M&G Total Return Credit Investment funds

M&G today announces the launch of two new credit Luxembourg-based SICAV strategies combining M&G Public Fixed Income team’s rigorous value-driven investment approach with sustainability factors.

The M&G Sustainable European Credit Investment Fund, managed by Gaurav Chatley and the wider Institutional Public Debt team, has been designed as a sustainable core proposition following the investment philosophy behind the strong 10-year track record of the €3.3bn M&G European Credit Investment Fund. With a strict bottom-up, research-driven and value-based approach to individual credit selection, the fund will be able to invest across the European investment grade universe.

Following the same value-driven approach, 14-year track record fund manager Richard Ryan will lead the M&G Sustainable Total Return Credit Investment Fund, designed as a flexible sustainable bond proposition sharing the same investment philosophy behind the €2.5bn M&G Total Return Credit Investment Fund. Capable of investing across the globe and with a focus on identifying attractive opportunities in developed markets, the fund will be able to invest in investment grade and high yield corporate bonds, while keeping the overall duration of the fund close to zero throughout the investment cycle.

The two funds, which will be classified as Article 8 under SFDR, will have sustainability factors at the core of their investment process. The teams will ensure environmental and social safeguards are in place and measure a range of additional sustainability indicators:

Avoidance of harmful issuers: no exposure to companies deemed to be in breach of the UN Global Compact Principles of human rights, labour, the environment and anti-corruption, and countries classified as “Not Free” by Freedom House.

Less harmful to the climate: the funds will typically have a lower weighted average carbon intensity than that of each funds’ investment universe.

More sustainable businesses: promoting the inclusion of issuers with superior ESG characteristics and excluding ESG laggards.

David Lloyd, Head of Institutional Public Debt at M&G Investments comments: “Investors are rapidly growing their appetite for sustainable and ESG-orientated solutions capable of meeting their long-term financial needs. M&G holds a long track record in providing clients with some of the best-in-class credit strategies, based on the same rigorous analysis and engagement we follow with ESG criteria. The funds we’re launching today have been designed with investors’ needs in mind, to strike the right balance between achieving favourable ESG outcomes while delivering attractive investment returns.”

Source: M&G