PGIM, the global investment management arm of Prudential Financial, has launched the PGIM Strategic Income ESG fund, as an addition to its suite of ESG-integrated fixed income offerings.
The fund will use an ESG-integrated multi-sector bond strategy, with a focus on income generation and capital appreciation. PGIM Fixed Income, which has $964 billion in assets under management, will manage the fund.
The strategy’s investment universe will cover investment grade and high-yield credit, emerging market debt, commercial mortgage-backed securities, asset-backed securities and government bonds.
In addition, the fund also has a significant underweight to US treasuries and agency-mortgage-backed securities, with a preference for focusing on more attractive opportunities across spread sectors.
The launch sees PGIM Fixed Income, which manages $170 billion in multi-sector fixed income solutions, bring its investment philosophy combined with ESG integration to investors outside the US in a UCITS fund format.
The launch of the new vehicle marks the group’s seventh dedicated ESG UCITS strategy offered to non-US investors, with each fund classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).
A proprietary ESG impact rating framework will be utilised to assess the issuer’s impact on the environment and society. The ratings will be assigned by a team of 110 analysts, working in collaboration with PGIM’s research team, which is led by Eugenia Unanyants-Jackson and overseen by PGIM Fixed Income’s ESG committee.
The fund will be managed by Michael Collins, Gregory Peters, Richard Piccirillo, Lindsay Rosner and Robert Tipp.
Kimberly LaPointe, head of PGIM Investments International, said: “While the strategic income marketplace is highly competitive, our team has proven its ability to generate strong risk-adjusted returns over the long term.
“Building on this compelling track record, the new UCITS portfolio will tilt towards issuers with higher ESG ratings, thus meeting the growing demand from sustainability-minded investors.”
The PGIM Strategic Income ESG fund is a sub-fund of the Irish-domiciled UCITS fund umbrella, PGIM Funds plc, and will be registered for sale in the UK and various European jurisdictions.
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