ESG Quarterly Update – October 2021
This bond fund aims to achieve a positive return over three years (volatility target: maximum 3% per annum) and seeks to promote environmental or social practices, while respecting risk diversification.
The fund invests worldwide mainly in shorter-term bonds in different currencies of various issuers of investment grade quality that seek to promote environmental or social practices. The average maturity of the portfolio is 3.5 years. The fund can use derivative financial instruments for hedging purposes.
The experienced and diverse investment team takes high-conviction decisions based on rigorous macro-economic, technical and issuer analyses. To define the investment universe, the team applies a two-step sustainability screening based on a proprietary scoring model: 1) to exclude issuers active in controversial businesses or intensively using fossil resources, 2) to include only those issuers whose sustainability scores exceed the defined minimum. In line with their continuous assessment of market developments, the team flexibly allocates interest-rate and credit risks in the portfolio, striving to benefit throughout the economic cycle.
We believe that Environmental, Social and Governance (ESG) factors can have an influence on the value of our investments and the main objectives should always be to enhance investor returns and to play a part in promoting better outcomes. This is why we decided to launch the Vontobel Fund - TwentyFour Sustainable Short Term Bond Income, within which we apply both positive and negative screening based on our proprietary ESG model.
The Fund has an ESG overlay of both negative and positive screens. A positive screen is applied to any issuer who scores greater than or equal to 34 in the TwentyFour Observatory ESG system/scoring model, while a negative screen helps enable the Fund to avoid companies with material production1 in the following sectors:
Tobacco Alcohol Weapons Animal Testing For Cosmetic Purposes Gambling Coal Intensive Industries Adult Entertainment UN Global Compact Violators2
Our initial modelling, where we applied an ESG overlay to our existing Absolute Return Credit fund’s performance, showed that the higher the ESG score (and therefore the higher the positive screen), the higher the return would have been, but also the higher the volatility. We chose a score of 34 as our modelling showed this would have given the best possible risk-adjusted returns (Sharpe Ratio), while keeping volatility less than 3% at all times, and having a high level of portfolio diversification.
(as at 31st December 2019)
*Negative and Positive screens would only be applied to a fund following the Sustainable, Long Only, Short Duration Credit approach, not to the existing Vontobel Fund - TwentyFour Absolute Return Credit Fund
1 We define 'material production' as meaning sources of revenue greater than 5%. We do however strongly believe in rewarding those companies who are providing solutions to ESG problems and/or are making positive strides to improve the direction of their company from an ESG perspective. Thus we have the flexibility when deciding whether a negative screen ultimately applies to take a view on the ESG 'Momentum' of a company.
2 We will not knowingly hold any issuer producing cluster munitions and landmines (anti-personnel mines) in line with international conventions.
3 Refers to the Vontobel Fund - TwentyFour Absolute Return Credit Fund G Share Class in GBP.
All data is as at 30 Sep 2021 unless otherwise indicated.
|1 Oct 2016 - 30 Sep 2017||1 Oct 2017 - 30 Sep 2018||1 Oct 2018 - 30 Sep 2019||1 Oct 2019 - 30 Sep 2020||1 Oct 2020 - 30 Sep 2021|
|Yield To Maturity||2.6%|
All data is as at 14 Oct 2021 unless otherwise indicated.
|Portfolio Manager||TwentyFour Asset Management LLP|
|Share Class Currency||GBP|
|End of fiscal year||31 August|
|Share Class Launch date||22 Jan 2020|
|Last distribution||0.64 (21 Sep 2021)|
|SFDR Classification||Article 8|
|Fund Registrations||AT, CH, DE, ES, FI, FR, GB, IE, IT, LI, LU, NL, PT, SE, SG, UO|
|Share Class Registrations||CH, GB, LI, LU, SG|
|Highest since launch||100.41|
|Lowest since launch||95.91|
|Fund size in mln.||GBP 422.20|
|Share class size in mln.||GBP 111.48|
|TER*||0.35% (28 Feb 2021)|
|Depository||RBC Investor Services Bank S.A.|
|Management Company||Vontobel Asset Management S.A.|
|Swiss Paying Agent||Bank Vontobel AG|
|Swiss Representative||Vontobel Fonds Services AG|
|Share class||Currency||ISIN||Distrib.||Type||Launch date||Management fee||TER*||TER Date|
|AHI (hedged)||EUR||LU2081486727||Dist||Institutional||22 Jan 2020||0.40%||0.53%||28 Feb 2021|
|AHI (hedged)||CHF||LU2210410036||Dist||Institutional||27 Aug 2020||0.40%||0.53%||28 Feb 2021|
|AHI (hedged)||USD||LU2210409616||Dist||Institutional||27 Aug 2020||0.40%||0.53%||28 Feb 2021|
|AN||GBP||LU2386632371||Dist||Retail||4 Oct 2021||0.40%|
|AQG||GBP||LU2081485596||Dist||Institutional||22 Jan 2020||0.25%||0.35%||28 Feb 2021|
|AQI||GBP||LU2081485919||Dist||Institutional||22 Jan 2020||0.40%||0.50%||28 Feb 2021|
|AQNG||GBP||LU2081485679||Dist||Retail||22 Jan 2020||0.25%||0.39%||28 Feb 2021|
|G||GBP||LU2081485240||Accum||Institutional||22 Jan 2020||0.25%||0.35%||28 Feb 2021|
|HI (hedged)||CHF||LU2210409962||Accum||Institutional||27 Aug 2020||0.40%||0.53%||28 Feb 2021|
|HI (hedged)||USD||LU2081487709||Accum||Institutional||27 Aug 2020||0.40%||0.53%||28 Feb 2021|
|HI (hedged)||EUR||LU2081486560||Accum||Institutional||22 Jan 2020||0.40%||0.56%||28 Feb 2021|
|HNG (hedged)||USD||LU2386631993||Accum||Retail||4 Oct 2021||0.25%|
|NG||GBP||LU2081485323||Accum||Retail||22 Jan 2020||0.25%||0.39%||28 Feb 2021|
* TER includes performance fee where applicable
All data is as at 30 Sep 2021 unless otherwise indicated.
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|Factsheets & Commentaries|
|Monthly Commentary||Sep 2021|
|AGM EGM invitation||May 2021|
|AGM EGM invitation||Jan 2021|
|AGM EGM invitation||Jan 2020|
|Articles of Association||Apr 2016|
|Notification to Investors||Sep 2021|
|Notification to Investors||Jul 2021|
|Notification to Investors||May 2021|
|Notification to Investors||Mar 2021|
|Notification to Investors||Feb 2021|
|Notification to Investors||Nov 2019|
|Sales Prospectus||Sep 2021|
|View more Legal Documents View less Legal Documents|
|Annual Report||Aug 2020|
|Quarterly Distribution||Sep 2021|
|Semi-Annual Report||Feb 2021|
|UK Tax Reporting||Aug 2020|
|UK Tax Reporting||Aug 2019|
|View more Financial Reports View less Financial Reports|
|Holiday Calendar 2021||Jan 2021|
|Order Subscription Form||Jan 2020|
|Sanctioned Countries||Sep 2016|
|Shareclass Naming Convention||Jun 2021|