Vontobel Fund - TwentyFour Strategic Income Fund

* TER includes performance fee where applicable

Summary

The Sub-Fund promotes environmental and social characteristics by following integration and exclusions approaches by investing in debt securities of companies with favourable Environmental, and Social scores.

No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective a sustainable investment.

Environmental or social characteristics of the financial product

The Sub-Fund invests in debt securities of companies with favourable Environmental and Social combined scores. To define the investment universe, the team applies a sustainability screening based on a proprietary scoring model to include only those issuers whose sustainability scores exceed the defined minimum.

Investment strategy

Our investment process consists of detailed, systematic qualitative and quantitative analysis of a potential investee’s sustainability risks and sustainability factors (collectively Sustainability Indicators). Integrating Sustainability Indicators is a central pillar in the investment process with the aim of improving the long-term risk-return characteristics of the sub-fund’s portfolio and supporting elevated social or environmental practices by the investee companies.

Proportion of investments

We have applied our sustainability selection criteria to the majority of the securities in the sub-fund.

Monitoring of environmental or social characteristics

Compliance with the environmental and social characteristics is monitored on an on-going basis.

Methodologies

Companies must have a combined E and S score above a minimum threshold  based on our proprietary scoring model and we positively screen companies through a comprehensive analysis process, which may include the use of specialized rating agencies and systems.

In addition to the scoring of securities, the portfolio management system enables us to understand positive or negative changes and to assess individual bonds on a relative value basis, given E and S factors – in this sense the ESG assessment does not solely dictate buy or sell recommendations, but it is part of an overall assessment of the validity of an investment decision. Further information on the model and the ESG approach can be found at https://www.twentyfouram.com/responsible-investment.

Data sources and processing

The sustainability ratings are based upon information raw data from specialized third-party ESG data providers compiled and evaluated in the proprietary in-house sustainability model database. Additional fundamental information from companies, media, NGOs as well as international organizations is evaluated in the database. The major third-party ESG data provider is ASSET4.

Limitations to methodologies and data

The data obtained from third-party data providers or issuers may be incomplete, inaccurate, or unavailable and the assumptions or models on which internal analysis rests may have flaws that render the internal assessment incomplete or inaccurate. As a result, there exists a risk of incorrectly assessing a security or issuer, resulting in the incorrect inclusion or exclusion of a security. There is also a risk we may not apply the relevant criteria of the ESG research correctly or that the sub-fund could have indirect exposure to issuers who do not meet the relevant criteria.

Due diligence

Each asset in the portfolio has its sustainability performance reevaluated using the sustainability framework once a year by our investment team.

Engagement policies

The sub-fund applies the Vontobel Asset Management voting and engagement policies. For the equity funds, voting rights are executed under the responsibility of the portfolio manager, by using proxy service providers for research, voting recommendations and voting administration. Bond investors do not have voting rights. Engagement is part of the ESG research process. It includes communications between the ESG research team and the management teams of investee companies, typically in case of specific issues ore controversies that may cover ESG concerns.

Designated reference benchmark

This sub-fund does not have a designated reference ESG benchmark, but applies a conventional benchmark whose construction does not take into account ESG criteria.