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PGIM unveils Global Total Return ESG Bond Fund

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PGIM has expanded its environmental, social and governance (ESG) offerings with the launch of the PGIM Global Total Return ESG Bond Fund. 

Managed by PGIM Fixed Income, the PGIM Global Total Return ESG Bond Fund is the second dedicated ESG UCITS strategy offered to non-US investors, following the June 2020 launch of the PGIM Global Corporate ESG Bond Fund. 

ESG considerations are fully integrated into all PGIM Fixed Income’s investment processes. All securities the firm invests in across all portfolios are fully analysed in relation to credit material ESG aspects that are integrated into our credit analysis. PGIM Fixed Income also utilises its proprietary ESG impact rating framework to assess issuers’ impact on the environment and society – with ratings assigned for every issuer. These ESG ratings are assigned by its team of more than 110 analysts and are overseen by PGIM Fixed Income’s ESG committee. The new PGIM Global Total Return ESG Bond Fund, which aims to deliver returns in excess of the Bloomberg Barclays Global Aggregate Index, is designed to emphasise issuers with stronger environmental, social and governance characteristics and practices than other global flexible bond portfolios. 

The fund invests in a diversified portfolio of securities across the global fixed income universe, both in investment grade and high yield, denominated in US dollar, euro, yen, or in other developed or emerging market currencies. 

It is managed by an experienced team of investment professionals from PGIM Fixed Income – Robert Tipp, Michael Collins, and Matthew Angelucci. The trio also manage the existing PGIM Global Total Return Bond Fund, which was launched in 2017.  

In addition to launching the new dedicated ESG strategies, PGIM Fixed Income has been increasingly active in its ESG focus, recently hiring Eugenia Unanyants-Jackson for the newly created role of head of ESG research. 

Tipp commented: “At PGIM Fixed Income, we believe ESG considerations can impact the performance of our investment portfolios, which is why we integrate these factors into our research and decision-making processes. While many global fixed income markets have rebounded since the lows of the coronavirus panic earlier last year, we expect volatility and confusion to remain high, creating opportunities to add value through active management. Our strategy combines global macro views and bottom-up fundamental research to identify the best fixed income opportunities globally.” 

Kimberly LaPointe, head of PGIM Investments’ international business, adds: “We continue to have conversations with clients across the globe wanting to increase portfolio allocations to ESG investments. As investors moved back into the market post the Covid-19 drawdown, we saw an acceleration into ESG funds. Coupled with the rising demand, we also see government stimulus packages and regulation focused on ESG.  

“Drawing on the active management expertise of PGIM Fixed Income, we are pleased to offer a flexible, global, multi-sector bond fund with an emphasis on holdings in higher-rated ESG issuers. While ESG factors are already integral to PGIM Fixed Income’s investment process, this fund, with its explicit ESG investment objective, adds to our suite of active fixed income solutions.” 

The PGIM Global Total Return ESG Bond Fund launched on 25 February 2021 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 Denmark, Norway, Sweden, UK, Germany, Austria, Netherlands, and Switzerland.                

The funds are not being publicly offered in the US and only qualified investors are permitted pursuant to applicable private placements. 

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