Our investment approach
Our investment and credit process
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Sustainable investing approach
When it comes to sustainable investing, we empower investors by offering choice, confidence, and flexibility.
We believe that stewardship is an important consideration in issuer analysis and that the inability or reluctance to address material ESG challenges could negatively affect a company’s credit profile. ESG assessments and research are incorporated into our proprietary fundamentals-based credit model, which helps inform our broader credit analysis and issuer recommendations.
Our mosaic approach to ESG research includes third-party research, company’s ESG policies and goal disclosures, rating agency research, engagement with a company’s management, and more.
Tiered-risk approach (low to high) measures the severity of ESG issues, which is part of the qualitative assessment in our proprietary credit analysis. ESG risks and opportunities are weighed, along with other qualitative and quantitative credit metrics.
We use a negative screening process to avoid the worst performing and controversial companies.
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Past performance does not guarantee future results.
Fixed‐income investment options are subject to interest rate risk, and their value will decline as interest rates rise. Risks of preferred securities differ from risks inherent in other investments. In a bankruptcy preferred securities are senior to common stock but subordinate to other corporate debt. Preferreds also contain risks including coupon deferral risk, credit risk, call risk, conversion risk and write-down risk.
ESG integration is considered across all actively managed asset classes, with the approach determined by each investment group’s process. This information is specific to the strategies managed by the individuals providing this content and various investment teams across Principal may have differing views of this approach.
Spectrum Asset Management, Inc. is an affiliate of Principal Global Investors.