Fund Complex: Thornburg Funds
Management Company: Thornburg Investment Management, Inc.
Funds Affected: Thornburg Better World International Fund
Sustainable Investing Strategy: ESG Integration
The fund seeks to invest in companies which in Thornburg’s view demonstrate one or more significant positive environmental, social and governance (ESG ) characteristics. Many market observers believe that these characteristics contribute to sustainable business and long term investment performance. Through Thornburg’s fundamental research process, the portfolio management team evaluates each potential investment based on a variety of factors, including traditional investment criteria such as the company’s ability to effectively allocate capital, willingness to pay dividends and repurchase shares, ability to sustain a competitive advantage, and ability to grow its core business. The portfolio management team also assesses each company’s ESG characteristics, emphasizing the following areas: Ethical business activity, corporate governance, environmental impact, social factors surrounding customers, suppliers and employees and product integrity.
Market observers differ in their perspectives and understanding of the importance of ESG factors to investment decisions. In its evaluation of potential investments, Thornburg may identify as significant certain ESG characteristics that are different from the characteristics that other investors may consider significant. Thornburg consequently may not consider the same ESG characteristics that other investors might consider in evaluating a potential investment. Similarly, Thornburg may assess the significance of ESG characteristics differently than some other investors, assigning either greater or lesser emphasis to a characteristic than another investor might assign.