SDG Engagement High Yield Credit
Seeking positive outcomes for investors and society.
Reasons to invest
Positive outcomes for investors and society
SDG investing
Future leaders
Investment strength
Engagement depth
Strategy overview

Why SDG Engagement High Yield Credit ?
In a world facing transitions in climate, technology, demographics, and geopolitics, it is imperative companies take action on sustainability. Investors have an important role to play. Our dual objective is attractive investment returns and a positive impact on society and the environment. These goals are not in opposition but are interlinked.
The strategy aims to generate a positive societal and environmental impact through engagement with companies focused on the United Nations’ Sustainable Development Goals (SDGs). We aim to deliver returns to society by identifying global high yield companies with impact potential. We engage with these companies to help them make positive changes to society and the environment.
How we invest
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.
Investment philosophy
We believe our dual objectives are interwoven and self-reinforcing. By identifying tomorrow’s impact leaders and engaging with companies on the SDGs, we aim to generate positive societal and environmental impact – which will, in the long term, reward the companies and their investors.

Investment process

Team

Fraser Lundie, CFA
Head of Fixed Income – Public Markets, Federated Hermes Limited

Nachu Chockalingam, CFA
Senior Credit Portfolio Manager, Federated Hermes Limited

Mitch Reznick, CFA
Head of Sustainable Fixed Income, Federated Hermes Limited
Product information
For the latest performance and vital information – including prices, key facts, identifiers and ratings
Our Purpose
To deliver Sustainable Wealth Creation
Like all our investment capabilities, Federated Hermes SDG Engagement High Yield Credit aims to deliver Sustainable Wealth Creation: the generation of wealth through investments that enrich investors, society and the environment over the long term.
Our business provides three equally powerful pathways to achieving this aim. Federated Hermes SDG Engagement Yield Credit features in the Impact route.
Responsible, active investing for long-term performance.
- Financial objective
- Best-practice integration of ESG analysis and engagement insights
- Some capabilities may enforce exclusions that reflect Portfolio Managers’ investment views
- Delivery of sustainable outcomes through effective stewardship
Thematic and values-based approaches for sustainable outcomes.
- Financial and sustainability objectives
- Best-practice integration of ESG analysis and engagement insights
- Exposure to sustainability themes
- Exposure to ESG leaders and industry exclusions that reflect sustainability values
- Delivery of sustainable outcomes through effective stewardship
Mission-led investment strategies to create positive impact.
- Financial and impact objectives
- Best-practice integration of ESG analysis and engagement insights
- Focus on companies generating impact or undergoing positive transformation
- Some capabilities may enforce exclusions that reflect defined sustainability values, impact considerations, or both
- Delivery of sustainable outcomes through effective stewardship
Federated Hermes
SDG Engagement High Yield Credit