SDG Engagement High Yield Credit

We are bottom-up investors with an acute focus on relative value at the security level. We employ a rigorous and repeatable relative-value investment process, which places as much emphasis on security selection as company selection. Our assessment of the general credit market and sector conditions determines our overall appetite for credit risk. Fundamental, valuation, ESG and technical analysis govern investment decisions in companies and individual securities.

The investment approach is based on our long-term, fundamental, high yield investment process. Our global approach to issuer selection improves the opportunities available for high yield investing and engagement outcomes. Portfolio companies must meet specific investment and engagement criteria. Each should have supportive fundamentals, cash-generative operations, be trading at attractive valuations – and must be willing to enter the long-term, transformative process of engagement. To identify potential for change, we have developed a proprietary scoring system (SDG scores).

Our engagement programmes focus on those areas where the greatest and most tangible positive outcomes can be generated in support of the SDGs, including emerging markets where the need is often greatest. We have dedicated engagers and draw upon the resources of Federated Hermes’ leading stewardship team, EOS. We recognise that any successful engagement strategy requires buy-in from a company’s management and board. Our approach is therefore to treat companies as partners.