Fund Rationale: UOB United Sustainable Credit Income Fund

UOB United Sustainable Credit Income Fund (the “Fund”)
SGD B Institutional Accumulation Shares (ISIN: SGXZ34585596)
Fund Manager Page
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Endowus have selected the UOB United Sustainable Credit Income Fund for its expertise in sustainable investing, its reputation for high quality fundamental credit research, and its unique proposition of combining in-depth ESG and fundamental research to deliver better risk-adjusted returns.

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Key Information

Fund Objective: Aims to provide capital growth by investing in a multi-sector portfolio of fixed income instruments issued by companies worldwide that contribute positively to the UN Sustainable Development Goals (“UN SDGs”).

Suitability: Investors seeking for income and capital growth over the long-term by investing in a diversified portfolio to the global credit market, specifically to companies contributing to the UN SDGs.

Cost: 
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* Total Fund-level Fees include fund management fee of 0.575%.
** Endowus do not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 23 November 2010
Share Class Inception: 25 January 2021
Benchmark: N/A (Endowus typically use the MSCI ACWI equity index and the Bloomberg Barclays Global Aggregate fixed income index as representative indexes to benchmark performance over the long term.)

Fund AUM: SGD 16.8m
Source: MorningStar as of 8 March 2021. Please refer to the FMC page for the most updated AUM.

🌱EU SFDR Rating: Article 9
Article 9 Funds are  committed to sustainable investing, contributing to environmental and/or social objectives and following good governance practices. Please refer to “Sustainable Investing Methodology” below for more information.

Regional Allocation:

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Sector Allocation:

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Source: MorningStar as of 28 February 2020. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown.

Selection Criteria

Endowus have selected the United Sustainable Credit Income Fund for the sub-manager’s expertise in sustainable investing,  its reputation for high quality fundamental credit research, and its unique capability of combining in-depth ESG and fundamental research to deliver better risk-adjusted returns. The Fund is sub-managed by Robeco, and one of their brands, RobecoSAM, have more than two decades of experience in sustainable investing research, and following the establishment of the UN SDGs in 2015, they were one of the first movers to develop a proprietary framework to rate companies in terms of their contributions to SDGs. 

Robeco are also a reputable manager for their credit strategies. Their investment philosophy is based on exploiting value opportunities created by a number of market inefficiencies that could exist in the credit market and is contrarian in nature. The Fund invests into 3 credit sectors: investment grade, high yield and emerging markets debt globally; it is unconstrained, so that the team can capitalise on the best opportunities they identify at any time. Although the fund itself does not have a long track record, the team has separate good track records in each of the credit sectors standalone. 

The Fund uniquely applies the SDG framework developed by RobecoSAM and integrates ESG research in bottom up research. Only companies that are neutral or contributing to the UN SDG goals will be included in the investment universe, and bottom-up fundamental research takes into account financially-material sustainability issues. As a result, the Fund aims to deliver both positive contributions to SDG and superior financial return. The Fund also aims to optimise yield opportunities and deliver stable payout for its distributive share class (not available on Endowus for now). Finally, the Fund is also expected to have a lower carbon footprint than a traditional credit portfolio.

🌱Sustainable Investing Methodology

United Sustainable Credit Income Fund (re: the underlying RobecoSAM SDG Credit Income Fund) has been classified as an Article 9 Fund under the EU Sustainable Finance Disclosure Regulation (SFDR). Article 9 Funds are funds committed to sustainable investing, contributing to environmental and/or social objectives and following good governance practices.

The portfolio is built on the basis of the eligible investment universe and an internally developed SDG framework for mapping and measuring SDG contributions. The Fund also has the ability to have an active dialogue with the invested companies to motivate these companies to improve their contribution to the United Nations Sustainable Development Goals (SDG). It does not, however, intend to acquire a large percentage of outstanding shares with the purpose of enabling the Sub-fund to significantly influence the management of the invested companies. 

Next to advancing the SDGs the Fund also takes into account environmental, social and governance characteristics. For the assessment, areas like corporate strategy, corporate governance, transparency as well as the product and service range of a company are taken into account.

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Updated by Endowus: March 2021

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