Global Bonds ESG

The purpose of this fund is to generate long-term capital appreciation while integrating environmental, social and governance (ESG) criteria into the portfolio construction process.

The investment fund is designed for investors seeking to diversify their portfolios through the inclusion of corporate and government bonds (both high-yield and investment-grade) denominated in Swiss francs or foreign currencies.

The fund may also invest marginally in CAT bonds,* which offer an advantageous risk/reward and provide useful diversification through a performance that is largely uncorrelated with conventional financial markets.

CAT bonds, which are part of the insurance-linked securities (ILS) category, are used by insurers and reinsurers to transfer the risks of predefined events to investors.

The fund is managed using a quantitative approach which harnesses indicators to define
investment opportunities in the various fixed-income segments. A top-down cascading method
is used to allocate capital among various grades and geographies, actively adjusting interest
rate, credit and currency risk to market conditions. This method is optimised for investors
whose reference currency is the Swiss franc and takes into account the cost of currency
hedging.

As the fund has a global coverage, currency hedges are used to maintain a net exposure of
70% or more to the Swiss franc at all times.

Incorporating ESG criteria is a fundamental part of our investment strategy.

The fund promotes environmental or social features, or a mix of the two, by investing in the vehicles and securities of issuers with an ESG profile above the median of their peers. Many controversial business activities and sectors are automatically excluded.

Exclusion

Issuers whose business practices run counter to our sustainable investment charter are excluded.

Direct investment selection

Issuers with E, S and G ratings above the median for their industry are given priority.

The fund invests in securities of issuers whose average ESG scores for the three pillars E, S and G are above 50, on a scale of 100.

Indirect investment selection

In addition to quantitative and qualitative financial criteria, the selection process for investment vehicles (investment funds and ETFs) includes non-financial criteria (ESG).

The portfolio is primarily invested in funds that incorporate ESG criteria by complying with one of the following:

Either they are classified as an Article 8 or Article 9 fund under the EU Sustainable Finance Disclosures Regulation (SFDR).
Or they have an ESG score higher than the average of the scores obtained in the three ESG pillars.