The index-managed international sovereign debt investments track the Bloomberg Barclays Global Treasury index which provides exposure to high quality, investment grade income-generating debt securities issued by governments from around the world. The top ten issuers, which represent 90% of the net assets, include the USA, Japan, France, UK, Italy, Germany, Spain, Korea, Belgium and Canada. Over 92% of the net assets have a Standard and Poor's credit rating of A or higher (39% AAA). These investments have no corporate (financial or non-financial) or securitised debt exposures.
The index-managed Australian debt investments track the Bloomberg AusBond Composite Index. The investments provide exposure to high quality, investment grade income-generating debt securities issued in Australia. Approximately 90% of the net assets are issued by government or government-related issuers. Over 97% of the securities have a Standard and Poor's credit rating of A or higher (73% AAA).
Treasury does not directly invest in any emerging, or frontier market debt securities and does not invest in any international investment grade or high yield corporate debt securities.
Treasury has ongoing access to ESG Government ratings which reflect how countries' exposure to and management of environment, social and governance risk factors may affect the long-term sustainability of their economies. These ratings assess living standards, safety and freedom, environmental sustainability, socio-economic environment, political governance, environmental vulnerability and externalities, human capital resources, natural resources and financial resources. Managing these risks has an important bearing on the long-term competitiveness and sustainability of a country's economy. A country's relative ESG risk exposure is measured against its risk management practices and demonstrated performance to form the basis for the final ESG Government ratings. These ESG ratings cover 198 countries and regions and provide ratings on more than 99 percent of outstanding sovereign debt in the market.
Based on this ESG sovereign debt assessment framework over 86 per cent of countries, by index exposure weight in the Bloomberg Global Treasury index, have a current ESG Government rating of A or higher, with Australia having an ESG Government rating of A.