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Investment in the Portfolio entails certain risks. Investment returns and principal value of the Portfolio will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Some of the principal risks of investing in the Portfolio include:
Strategy
Seeks to achieve high total returns through a combination of high income and capital growth through sustainable investments by:
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primarily capitalizing on global high yield corporate bond opportunities, with flexibility to find additional opportunities across emerging market debt and securitized assets
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Focusing on issuers that address the causes of and effects from climate change. This focus results in three sustainable investment themes which are either derived from the UN Sustainable Development Goals (UNSDGs) or aligned with the long-term global warming objectives of the Paris Agreement: Transition, Resilience and Innovation;
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employing a rigorous ESG assessment of individual issuers and securities, including a proprietary ESG scoring which enables the Portfolio to impose minimum ESG standards to identify issuers misaligned with its ESG objectives;
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maximizing the Portfolio’s sustainability impact through a strategic allocation to ESG bonds, such as green bonds contributing to the transition towards a net-zero carbon economy.
Portfolio Management Team
Investment Risks to Consider
These and other risks are described in the Portfolio's prospectus
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China market risk: The Fund will primarily invest in domestic securities of issuers located in China and so will be directly affected by volatility in securities markets in China and changes in the economic and political climate in China generally. The legal and regulatory framework for capital markets in China may not be as well developed as those of developed countries and entails additional risks.
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Counterparty and custody risk: The risk that the counterparty could become insolvent, unwilling or unable to meet its obligations, resulting in payments being delayed, reduced or eliminated.
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Currency risk: Investments may be denominated in one or more currencies which are different from the Portfolio’s base currency. Currency movements in the investments may significantly affect the net asset value of the Portfolio.
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Derivatives risk: The Portfolio may include financial derivative instruments. These may be used to obtain, increase or reduce exposure to underlying assets and may create gearing; their use may result in greater fluctuations of the net asset value.
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Emerging-markets risk: Where the Portfolio invests in emerging markets, these assets are generally smaller and more sensitive to economic and political factors, and may be less easily traded, which could cause a loss to the Portfolio.
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Hedging risk: Hedging may be used when managing the Fund, as well as for currency hedge share classes to eliminate the potential for gains along with the risk for loss. Measures designed to offset specific risks may work imperfectly, may not be feasible at times or may fail completely. As there is no segregation of liabilities between the share classes, there is a remote risk that, under certain circumstances, currency hedging transactions could result in liabilities with might affect the NAV of the other share classes and their assets may be used to cover those liabilities incurred.
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Leverage risk: The Fund implements a high use of leverage which may reach 400% of the total NAV of the Fund. Leverage presents opportunities for increasing both returns and losses because any event which affects the value of an investment is magnified to the extent leverage is employed.
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Liquidity risk: The risk that arises when adverse market conditions affect the ability to sell assets when necessary. Reduced liquidity may have a negative impact on the price of the assets.
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Market risk: Prices and yields of many securities can change frequently, sometimes with significant volatility, and can fall, based on a wide variety of factors, for example government policy or change in technology. he effects of market risk can be immediate or gradual, short-term or long-term, or narrow or broad.
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Operational (including safekeeping of assets) risk: The Fund and its assets may experience material losses as a result of technology/system failures, cybersecurity breaches, human error, policy breaches and/or incorrect valuation of units.
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Prepayment risk: The risk that in periods of falling interest rates, issuers may pay principal sooner than expected, exposing the Portfolio to a lower rate of return upon reinvestment of principal.
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Structured instruments risk: These types of instruments are potentially more volatile and carry greater market risks than traditional debt instruments, depending on the structure. Changes in a benchmark may be magnified by the terms of the structured instrument and have an even more dramatic and substantial effect upon its value. These instruments may be less liquid and more difficult to price than less complex instruments