Fund Complex: Neuberger Berman
Management Company: Neuberger Berman Investment Advisers LLC
Funds Affected: (1) Neuberger Berman Intrinsic Value Fund, Neuberger Berman Core Bond Fund (2) (3) Neuberger Berman Floating Rate Fund, Neuberger Berman Emerging Markets Fund (4) Neuberger Berman Unconstrained Bond Fund, Neuberger Berman Emerging Markets Debt Fund
Sustainable Investing Strategy: (1) ESG Integration, Shareholder engagement, (2,3) ESG Integration, Engagement, (4) ESG Integration
Summary:
(1) Portfolio managers may integrate governance factors into the investment process. They seek to invest in companies that have effective and independent boards composed of diverse, and currently active, CEOs and Chief Experience Officers. They look for companies where management and shareholder interests are aligned (often through high ownership of the company by management), with long-term incentive plans and CEO and management compensation and succession plans in place. The portfolio managers also seek out companies that have full transparency and disclosure, effective capital deployment strategies and value enhancing M&A policies. When appropriate, the portfolio managers may engage with portfolio companies regarding directors, strategy and financing in an effort to enhance shareholder value. The portfolio managers may also engage on financially material environmental and social issues.
(2,3) The Portfolio Managers will seek positive returns through in-depth credit research utilizing proprietary analytics processes to assess the strength of a company’s credit profile, examples of which include but are not limited to: their ability to pay principal and interest, their cash flow and balance sheet composition, their market position relative to competitors, the team’s assessment of Environmental, Social, and Governance (ESG) factors through the team’s proprietary scoring system as well as proactive engagement on ESG related topics.
(4) When assessing whether to buy or sell a security, the investment teams utilize internally generated research and proprietary quantitatively driven tools and frameworks (including an analysis of cash flows, ability to pay principal and interest, balance sheet composition, market positioning, and the team’s assessment of Environmental, Social and Governance (ESG) factors) to a) establish an internal outlook, b) evaluate the market’s outlook as it is reflected in asset prices, and c) contrast the two. The teams then use the information generated by this process to decide which securities the Fund will own. The teams will generally purchase securities if their internal outlook suggests a security is undervalued by the market and sell securities if their internal outlook suggests a security is overvalued by the market. The goal is to identify and evaluate investment opportunities that others may have missed.
Neuberger Berman
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