The Strategy is actively managed, globally diversified and consists of fixed income securities from issuers that can demonstrate that the risks arising from their ESG exposures are appropriately managed.
We match the principal characteristics of the benchmark by selecting instruments from issuers we believe manage their ESG exposures better than their peers. This policy drives the stock selection contribution to the Strategy’s risk and return. We then overlay a diverse selection of active positions that are drawn from a global opportunity set, encompassing positions in rates, currency, inflation and credit markets.
We consult investors on exclusions, such as those adopted by leading asset owners, national and supranational bodies. Where investors indicate a requirement for exclusions, we incorporate them within the Strategy.
The Strategy consists of 250 – 400 securities plus associated fixed income and currency derivatives. We report ESG strength relative to the benchmark on a sector-by- sector basis, using MSCI’s overall ESG score