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Yarra Capital Management

PRI reporting framework 2019

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

10.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

SSA

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Corporate (financial)

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Corporate (non-financial)

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Securitised

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
ESG analysis is integrated into fundamental analysis
ESG analysis is used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer's ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
SSA

Environmental

Social

Governance

Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

Securitised

Environmental

Social

Governance

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

SSA

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Corporate (financial)

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Corporate (non-financial)

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

Securitised

ESG principles are ingrained in how our Australian Fixed Income analysts invest and are a mainstream part of the ongoing research process.

The fundamental research framework is used to carry out in-depth analysis, focusing on the “Key Drivers” of an issuer. These are essentially the 3 to 5 key factors that are expected to determine whether a security/sector will outperform or underperform. 

All authorised investments of the portfolio must pass a thorough credit selection process to screen out investments that present an unacceptable credit, sector or liquidity risk to the fund’s portfolio and future performance. On a daily basis, credit analysts liaise with company management, external analysts, other stakeholders and the broader YCM investment team to identify trends and changes in outlook.

The credit risk model actively incorporates four key factors to create individuals scores, which are then weighted, to create an overall internal credit rating:

Financial profile - 20-30%
Business profile - 15-30%
Environmental, Social and Governance (ESG) profile - 15-30%
Market profile - 20-30%.

After completing the necessary credit work, a relative value framework determines the attractiveness or otherwise of new and existing investments, taking into account all aspects of market pricing, demand/supply dynamics and risk parameters.

12.3. Additional information.[OPTIONAL]


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