First Sentier Global Credit Fund

Product Name

First Sentier Global Credit Fund

Issuer

First Sentier Investors

Category

Investment

Type

Fund or Trust

Target

Wholesale, Institutional

Certified Since

2021

Asset Classes

Fixed income

Markets

Australia

Investment Approaches

ESG Integration, Negative Screening

It Includes:

    It has some level of screening for:

    • Riaa icons 41 Alcohol
    • Riaa icons 56 Animal cruelty
    • Riaa icons 36 Armaments
    • Riaa icons 33 Fossil fuels
    • Riaa icons 42 Gambling
    • Riaa icons 45 Genetic engineering
    • Riaa icons 52 Human rights abuses
    • Riaa icons 38 Labour rights violations
    • Riaa icons 34 Logging
    • Riaa icons 50 Nuclear power
    • Riaa icons 99 Pornography

    It fully excludes:

    • Riaa icons 35 Tobacco

    Overview

    The First Sentier Global Credit Fund utilises our proven Global Credit investment process, which focuses on the identification and avoidance of deteriorating companies. With a focus on responsible investment, the Fund typically favours companies that are managing long-term ESG risks most effectively. At the same time, the Fund avoids investment in various companies on ESG grounds, effectively providing an additional responsible investment overlay.


    Description


    The investment philosophy and process employed in the management of the Fund dates back more than 20 years, when our Global Credit strategy was launched. During that time, our analysis has indicated a link between corporate defaults and companies’ management of ESG risks. In short, firms that understand long-term ESG risks and how they might affect the business, and which implement processes and procedures to effectively manage and minimise these risks, are less likely to default and impair investors’ capital. 

    Accordingly, aspects of our Global Credit investment process are common to all funds managed:

    -       Full credit research analysis for corporate bonds owned (i.e. the assignment of independent credit ratings, that drive portfolio positioning);
    -       ESG risk assessment is fully integrated in the research process, focusing on non-financial risks; 
    -       An investment approach that typically results in low turnover, avoiding portfolio churn and undue transaction costs; 
    -       An expectation of modest outperformance over full market cycles; and
    -       Aim to avoid permanent impairment of capital (i.e. defaults or loss given default).
     

    The Global Credit Fund utilises this proven investment process, which has been successful in avoiding defaults relative to the benchmark index over the long term. Our global credit funds avoid investment in particular industry sectors, as well as in individual companies where ESG risks are deemed excessive. 

    Funds are prohibited from investing in tobacco companies. This exclusion applies to any company classified in the ‘Consumer Non-Cyclical – Tobacco’ sub-sector of the benchmark. 

    In addition, we fully support the conventions relating to the manufacture of anti-personnel mines (Ottawa Convention) and cluster munitions (Oslo Convention). The manufacture and use of such weapons undermines the basic fundamental principles of human rights. As a result, Funds are unable to invest in debt securities issued by companies that have been identified, by credible third parties, as being involved in the manufacture of such weapons. 

    Please refer to Question 44 for details of other exclusions. 

    Other products certified by the Responsible Investment Association Australasia (RIAA)

    First Sentier Multi-Asset Real Return Fund

    First Sentier Responsible Listed Infrastructure Fund

    Sign up to learn more and get updates on ethical and responsible investing