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Authors

  • 29/04/2019
    Fixed Income
    Audra Delport
    Audra Stundziaite, Deputy Head of Credit Research, explores the theme of consolidation in the energy sector.
  • 24/04/2018
    Fixed Income
    Andrey Kuznetsov
    Almost two years ago, Andrey Kuznetsov, Credit Portfolio Manager and Audra Stundziaite, Senior Credit Analyst, at Hermes Investment Management, argued that the market for European hybrids was attractive for both issuers and investors. Today, they revisit the case for hybrids and ask: in the growing global hybrid market, where is the relative value? In 2016, we argued in favour of an increased allocation to the European hybrid market in an issue of our quarterly commentary Spectrum, “Putting two and two together: how hybrids can add up for investors.” The central premise was that hybrids were attractive for investors due to the inherent investment benefits they offer and a supportive economic backdrop
  • 07/02/2018
    Fixed Income
    Audra Delport
    Engagement should be an integral part of any investment approach. By engaging with issuers, investors can encourage them to adopt better environmental, social and governance (ESG) practices, and thereby, deliver a better financial return and a public good. In a new case study, Audra Stundziaite, Senior Credit Analyst and Jaime Gornsztejn, Director in Hermes EOS, the stewardship and engagement team at Hermes Investment Management explain how they addressed ESG concerns by engaging with oil producer Pemex.
  • Audra Delport
    At the surface, the oil industry might appear impervious to the cleansing efforts of responsible investors. But if we drill deeper, it is clear that integrating environmental, social and governance (ESG) analysis into investments – and engaging with companies – can deliver both a better financial return and a public good. In the latest Spectrum Audra Stundziaite, Senior Credit Analyst, and Jaime Gornsztejn, Associate Director, Hermes EOS, at Hermes Investment Management, discuss how ESG analysis and engagement with Petrobras and Pemex, the Brazilian and Mexican state-owned oil giants, enabled them to pinpoint risks and subsequently work constructively with the companies to help improve their financial performance. Oil poses more than a few headaches for ESG investors. Besides the obvious high carbon content of petroleum products, the industry as a whole has accrued a reputation as risky across a range of ESG measures. For credit investors, however, oil companies are a significant presence, as they are the largest debt issuers in the global high-yield market, accounting for approximately 16% of notional debt. With so much at stake, it would be short-sighted to abandon the oil field to disengaged industry participants. Credit investors, like shareholders, need to discuss ESG concerns with oil firms if the industry is to improve. In turn, companies like Petrobras and Pemex, the Brazilian and Mexican state-owned oil majors, are heavily reliant on credit markets for financing and should be compelled to engage with bondholders.