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UBAM - Global Responsible Convertible Bond IHD CHF

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UBAM - GLOBAL SUSTAINABLE CONVERTIBLE BOND

Drawing on the convex nature of convertible bonds within a responsible investment framework

The dual nature of convertible bonds – a bond instrument with an embedded conversion option – allows them to combine the defensive qualities of fixed-income securities with the upside potential of equities. This attractive feature is at the root of the asset class’ intrinsic convexity. UBAM – Global Sustainable Convertible Bond aims to provide investors with the asymmetric risk–return profile of convertible bonds within a socially responsible investment (SRI) framework.

 

Key points

* The combination of two areas of expertise: convertible bond  management & extra-financial analysis

* A conviction-driven approach focused on companies combining strong financial value and high sustainability standards

* A cautious approach to credit risk embedded throughout the investment process

* Focus on sustainability issues with material impact on corporates’ performances, starting with climate risk

* A volatility-controlled exposure to companies with superior growth prospects in sectors exposed to attractive secular trends

* Regional diversification across the main convertible bond markets (the US, Europe, Asia)

 

Investment case

Convertible bonds have a long track record of delivering equity-like returns with much lower volatility and reduced drawdowns over the long term. This comes from their dual nature – a bond instrument with an embedded conversion option – which grants them an asymmetric risk–return profile relative to equities.

The benefits of convexity make convertible bonds an “all-weather” asset class as regards portfolio construction. Besides this, being partly exposed to equities, convertible bonds have lower sensitivity to interest rate movements than straight bonds of identical duration.

The outlook for the asset class is highly favourable as an increasing number of companies are turning to convertibles for their financing needs and investors are increasingly seeing them as a valid alternative to both equities and bonds.

With UBAM – Global Sustainable Convertible Bond, UBP offers access to convertible bonds’ intrinsic convexity for investors keen to expose some of their assets, through SRI, to issuers that value fairness and sustainability in investment.

 

Fund concept

UBAM - Global Sustainable Convertible Bond seeks to capitalise on the convex nature of convertible bonds through a balanced aggregate sensitivity to equity markets and careful analysis of the credit risk. A global allocation enables investors to benefit from a wide range of investment opportunities, including companies with superior growth prospects and exposure to attractive secular trends (e.g. technology and healthcare).

Aside from convertible bonds’ most attractive features, the strategy promotes sustainability in investment through stringent environmental, social and governance (ESG) criteria.

This leads the team to favour companies that stand out for their commitment to sustainable development, based on the assessment of four equally weighted pillars: climate risk, environmental strategy, social capital, and governance.

The combination of convexity-driven financial analysis with a stringent extra-financial assessment of the issuers aims to provide investors with enhanced convexity benefits in a sustainable framework over a complete market cycle.

Please consult the document "Transparency Code" here.

Performance

UBAM - Global Responsible Convertible Bond IHD CHF
NAV - Net Asset Value
Date
Data source : UBP SA
Historical performance MTD YTD 1 year 3 years 5 years Since launch
Historical performance 2.32% 2.32% -11.63% -10.55%
12 months rolling 01.22 - 01.23        
12 months rolling -11.63%
Disclaimer

Performance under 1 year is shown cumulated. Performance over 1 year is shown annualised.

Past performance is not indicative of present and/or future results. Price and availability are subject to change without notice. The value of investments may go up or down and investors may not get back the amount invested. Changes in foreign exchange rates may also cause the value of investments to fluctuate.

Library

LEGAL DOCUMENT
Title Updated English German French Italian
Annual report 31.12.2021 PDF
KID PRIIPS 01.01.2023 PDF
Prospectus 15.09.2022 PDF
Semi-annual report 30.06.2022 PDF
Shareholders letter 27.12.2022 PDF PDF PDF PDF
Status - Articles of Association 04.02.2020 PDF PDF
MARKETING DOCUMENTATION
Title Updated English German French Italian
Monthly Report 31.12.2022 PDF
Product card 31.12.2021 PDF PDF PDF PDF
Quarterly comment 31.12.2022 PDF

Registration

ATAustria
BEBelgium
CHSwitzerland
DEGermany
DKDenmark
ESSpain
FIFinland
FRFrance
GBUnited Kingdom
IEIreland
ILIsrael
ISIceland
ITItaly
KRSouth Korea
LULuxembourg
NLNetherlands
NONorway
PTPortugal
SESweden
SGSingapore
TWTaiwan
ZASouth Africa
ATAustria
BEBelgium
CHSwitzerland
DEGermany
DKDenmark
ESSpain
FIFinland
FRFrance
GBUnited Kingdom
IEIreland
ILIsrael
ISIceland
ITItaly
KRSouth Korea
LULuxembourg
NLNetherlands
NONorway
PTPortugal
SESweden
SGSingapore
TWTaiwan
ZASouth Africa

Italy: I shares are only notified to the CONSOB.

Singapore: Sub-funds registered with the MAS (Monetary Authority of Singapore) can only be offered to “accredited investors”.


Fiscal information

Titre Statut
End of fiscal year 31 December
UK RFS No
German transparency No
Austrian transparency No
Italian reporting Yes
Switzerland RNI Yes

Sustainability-related disclosure

 

Summary

This Sub-Fund aims to take advantage of the specific risk/return profile of convertible bonds within a sustainable framework, using a fundamental, bottom-up investment process and a global allocation across major markets (US, Europe and Asia primarily).

It promotes environmental (E) or social (S) characteristics but does not have as its objective sustainable investment. However, it will have a minimum proportion of 10% of sustainable investments.

The E and S characteristics promoted are:

·         a higher average ESG score than the Refinitiv Global Hedged Convertible Bond (EUR) index.

·         a lower weighted average carbon intensity than its index

·         the exclusion of companies in breach of UN Global Compact.

The Refinitiv Global Hedged Convertible Bond (EUR) index is a standard reference representing the Sub-Fund’s universe but is not aligned with the environmental and social characteristics promoted by this Sub-Fund.

The integration of ESG considerations is done at 3 levels:

·         Negative screening: exclusion of harmful activities (revenue threshold may apply) and norm-based screening.

·         ESG inclusion approach (positive screening), based on internal qualitative ESG assessment of issuers and underlying equities covering four pillars: I) climate risk, II) environmental strategy, III) social capital and IV) governance.

·         Portfolio construction: allocation is conviction-driven, with larger weight allocated to companies offering both sound financials and higher extra-financial standards, according to the Investment Manager’s analysis.

The Investment Manager takes the quality of governance into consideration in its assessment, including accounting practices and the quality of the financial data disclosed, the composition of the board of directors, the independence of the chairman and the board of directors, the shareholding structure, dispersed ownership of shares, as well as remuneration policies.

The Investment Manager takes into consideration and seeks to minimize the following potential principal adverse impacts of its investments: 1) GHG Intensity of Investee Companies, 2) Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises, 3) Board Gender Diversity and 4) Exposure to Controversial Weapons.

The application of defined ESG exclusion criteria, combined with sustainability assessment of companies, leads to an exclusion rate of at minimum 20% from the eligible investment universe post financial analysis.

At all times, a minimum of 90% of the Sub-Fund’s net assets is invested in companies covered by internal or external ESG research.

The binding criteria used to attain each of the environmental and/or social characteristics promoted by the Sub-Fund are integrated in control systems, to ensure pre- and post‑trade checks. Compliance is monitored by the Risk department on an ongoing basis.

The Investment Manager may use data reported directly by issuers or sourced from third-party data providers such as MSCI ESG Research or Sustainalytics. The service and data quality provided by third-party ESG data providers are reviewed regularly.

Depending on the metric considered, some data may be estimated by data providers. Although the Investment Manager applies a thorough selection process of third-party providers, their processes and proprietary ESG methodology may be flawed. As a result, there is a risk of incorrectly assessing an issuer, resulting in an inappropriate capture of ESG risks and potential incorrect inclusion or exclusion in the product. This is expected to have limited impact on the overall environmental and/or social characteristics promoted by the product.

The investment due diligence process ensures that the investment decisions comply with the objectives and the investment strategy of the Sub-Fund. The consideration of sustainability-related risks is integrated into the investment decision-making process to ensure better-informed investment decisions as well as awareness of the risk exposure. The first level of due diligence is conducted by the Investment Manager, while the second level is conducted by the Risk department.

Engagement with investee companies may occur. It can be conducted collaboratively as well as, on an ad-hoc basis, directly by the investment team.

No reference benchmark has been designated for the purpose of attaining the environmental or social characteristics promoted by this Sub-Fund.

For more information, please see the fund’s Sustainability-related disclosures.

  • ISIN code
  • LU2256754651
  • Data as at
  • 25.01.2023
  • Latest NAV
  • 80.28 CHF
  • Fund's AUM
  • 32.58M EUR

Fund data

  • Fund name UBAM
  • Legal structure SICAV
  • Jurisdiction Luxembourg

Sub-fund data

  • Base currency CHF
  • Asset class Convertible Bond
  • Geographical bias Global
  • Inception date 21.01.2021
  • SFDR classification 8

Share class data

  • Description IHD CHF
  • Launch date 03.02.2021
  • Dividend type Distribution (yearly)
  • Minimun initial investment None
  • Subscription Daily
  • Redemption Daily
  • Management fee 0.55%
  • Performance fee No
  • Performance fee rate N/A
  • Last dividend 0.00 CHF 22.04.2022

Identifiers

  • Bloomberg UBGSCIH LX
  • Telekurs 58664880
  • Reuters N/A
  • WKN N/A
  • SEDOL N/A
  • Morningstar N/A
  • Financial Express N/A

Manager(s)

    Marc Basselier / Benjamin Schapiro