On October 17, 2020 Business Standard reported that a “top-performing emerging-market bond fund is avoiding investments in Russia, China, and Saudi Arabia as the three countries score too low in its ratings for environmental, social, and governance risks.
The $1.5-billion Candriam SRI Bond Emerging Markets Fund has outperformed almost 90 per cent of peers in the past three years and screens for ESG factors. The bottom 25 per cent of countries on the fund’s ranking get blacklisted, no matter how big a role they play in the bond world.
Candriam’s model evaluates how countries access and deploy natural, human, social and economic capital. Regimes deemed to be non-democratic or repressive are stripped out, along with those with a credit rating lower than B-, or six levels below investment grade. The fund’s biggest country holdings are Mexico, Indonesia and Chile.
Currently the model excludes 33 emerging markets, or about 40 per cent of the JPMorgan EMBI Global Diversified Index, considered the benchmark for most emerging-market sovereign bond funds, Magda Branet, deputy head of emerging-market debt at Candriam, said during a webinar earlier this month.”
You may read the article on the Business Standard internet site.