The fund will use a three-stage screening process to help M&G choose the firms that the fund will invest in.

M&G Investments, the international asset manager, has launched an environmental, social and governance-driven fund for bond investors who want higher yield strategies in the fixed income space, married to a desire to do good on a number of fronts. 

Approaches that take account of the environment, social needs and good governance are central to how high-yield bonds are chosen chosen by the ESG Global High Yield fund, which will be supported by M&G’s capabilities in the credit space, the firm said.  

The ESG Global High Yield fund will be co-managed by James Tomlins and Stefan Isaacs, both specialists with more than 28 years in the sector. 

The fund will use a three-stage screening process to help M&G choose the firms that the fund will invest in. Those companies in breach of United Nations Global Compact principles will be filtered out, as will those who derive revenue from tobacco, alcohol, defence and other specific sectors. The third screen will filter companies based on ESG ratings provided by MSCI, taking into account everything from energy efficiency to working conditions and product safety. 

“Investors’ attitudes towards responsible investment and demand for ESG solutions have evolved significantly in recent years. We can play an essential role in changing attitudes and expanding responsible investment across asset classes and markets,” added Graham Mason, chief investment officer for M&G equity, multi-asset and retail fixed interest.

This publication recently reported that M&G had announced Richard Hughes, fund manager of the M&G UK Income Distribution Fund since 2002, will retire on 31 March 2018.