Sustainable, Responsible &/or ESG Policy:

The BlueBay Global High Yield ESG Debt Strategy is designed to invest in high yield bonds globally, combined with observing environmental, social and governance (ESG) criteria. On the ESG side, this means explicitly and proactively incorporating ESG considerations to ensure the Strategy invests in securities whose operations take appropriate account of ESG concerns and risks.

Individual product designs enable us to utilise these alpha source decisions to construct portfolios across multiple strategies and create specific investment solutions designed to meet client needs. Our use of proprietary technology and quantitative tools, including our Alpha Research Tool (ART) and Alpha Decision Tool (ADT) system, permits a consistent and controlled approach to decision making, security selection, position construction and risk management with an emphasis on capital preservation.

BlueBay's approach for investing in global high yield places strong emphasis on downside risk management, with in-depth proprietary research driving the security selection process. We marry this with top-down macro analysis to ensure efficient beta management and upside capture. We exploit capital appreciation opportunities through rigorous, relative-value analysis across sectors, issuers and capital structures, as well as positive risk migration and credit trajectory. Consistent adherence to our style and process is ensured through all market conditions by a tried and tested, team-driven approach.

The Global High Yield ESG Bond Fund builds on the firm level ESG components, either by applying an existing approach in a different way or featuring a new component:

• ESG integration – enhanced (i.e. exclusions based on ESG assessment with minimum ESG requirement): ESG factors are taken into consideration to enhance investment analysis and inform the investment decision-making process. There is a nuanced approach in that depending on the outcome of the issuer ESG evaluation, some issuers may be prohibited from investment independent of whether they represent an ESG risk. This relates to the issuers assigned the worst ESG metrics (exclusion of issuers which have been assigned a Fundamental ESG (Risk) Rating of ‘very high’ and exclusion of those assigned a ‘high’ on a case-by-case basis).
• Stewardship - enhanced: ESG engagement efforts are not limited to a focus only on ESG risks but can also encompass ESG factors more generally. Depending on the sub-asset class there may also be voting exposure;
• Exclusions / negative screening - enhanced: there are more extensive restrictions in place for this Fund, with the scope going beyond that applied at the firm level. A combination of product-based and conduct-based screens are applied.
  
  

ESG negative screening includes two elements:

ESG negative screening (product based):

• Corporates 1,2 – adult entertainment(>10% revenues – production/distribution/retail),
• alcohol (>10% revenues – production/distribution/retail),
• controversial weapons (any production, sales/trade, testing, research and development, system integration, maintenance, maintenance/service/management, use, storage and transport of cluster munitions and anti-personnel landmines, chemical & biological weapons. Any producers of depleted uranium and nuclear weapons, undetectable fragmentation weapons, incendiary weapons and blinding laser weapons),
• conventional weapons (>10% revenues – production of systems and components),
• fossil fuels related (Arctic drilling (0% revenues) / oil & gas extraction & production (>5% revenues) / oil sands exploration & production (0% revenues) / >10% revenues – exploration, extraction, distribution or refining of oil fuels / >50% revenues – exploration, extraction, manufacturing or distribution of gaseous fuels / thermal coal - mining/power generation* (>10,000 MW installed capacity / >5% revenues/operations / electricity generation with a GHG intensity of >100g CO2e/kWh, >1% revenues – exploration, mining, extraction, distribution or refining of hard coal & lignite),
• gambling (>10% revenues – operations/support),
• nuclear energy* (>5% revenues – mining/production/supply),
• tobacco (0% production & cultivation, >5% revenues – distribution/retail)

Normed based screening (conduct-based)

• Corporates 1,2 – compliance with UN Global Compact principles (fail), compliance with OECD MNE Guidelines (non-compliance), ESG controversy exposure (red flag)
• Sovereigns 1,3: controversial jurisdictions (Financial Action Task Force (high risk), UN Security Council Sanctions (subject to)), Freedom House Index (‘not free’), UN conventions and treaties: corruption convention (not party to) / torture and punishment convention (not party to/no action/not ratified) / Paris Agreement (no action/not ratified)

Notes: Source: RBC Global Asset Management, as at 1 April 2025.

1. As determined by third-party ESG data. Further information is available upon request;
2. As determined by a third-party organisation. Further information is available upon request;
3. As determined internally by Investment Compliance. Further information is available upon request;
4.  As determined by an internally derived issuer ESG evaluation framework. Fundamental ESG (Risk) Rating is assigned at an issuer level. This relates to an assessment of the extent to which the issuer is effectively managing the key ESG risks it faces. Categories range from 'very high' ESG (Risk) Rating to 'very low' ESG (Risk) Rating and is a function of the ESG risk profile of an issuer and how well it manages these risks. Further information is available upon request;
5. Excludes issuers with 'very high' Fundamental ESG (Risk) Rating and excludes issuers with 'high' Fundamental ESG (Risk) Rating (case by case);
6. In certain instances, including but not limited to those involving quantitative investment, passive and certain third-party sub-advised strategies, there is no engagement with issuer;

* Exceptions permitted in specific instances for power utility companies in the case of transmission/distribution/capacity thresholds.

ESG Investment Criteria

ESG negative screening includes product-based exclusions and conduct-based exclusions. Once screened, a reduced universe of potential investments is evaluated during the subsequent stages of our investment process to determine absolute and relative attractiveness.

We source the list of excluded issuers based on two complementary external sources, both consistent in their focus areas. Any issuers listed as restricted based on screening by either data sources will be excluded from investment in the Strategy. In our experience of managing the Strategy so far, there has been a high degree of overlap in issuers restricted on either list.

• Norges Bank Investment Management (NBIM) SRI policy:

The Strategy’s approach to ensuring compliance with the NBIM SRI policy has been arrived at following a review of the best possible approach given the nature of how the NBIM information on excluded companies is communicated publicly. We note that although NBIM publicly disclose the list of excluded issuers on their website, they only publish the list once they have been themselves able to exit their positions in the disclosed issuers in an orderly manner while securing good pricing. The public disclosure on the NBIM website is the first public notification of this information.

Updates to the restricted list are usually made based on recommendations from the Council on Ethics, which informs the SRI policy of the Norwegian government pension fund, which NBIM enforces. The role of the Council on Ethics is to evaluate whether or not the Norwegian Global Pension Fund’s investments in specified companies is inconsistent with its Ethical guidelines.

The following criteria may lead to product-based exclusions including:

• production of weapons that violate fundamental humanitarian principles through normal use;
• tobacco production or tobacco products;
• produce cannabis for recreational use
• sale of weapons or military material to the governments of certain sovereign states.
• mining companies and power producers which themselves or through entities they control derive 30 per cent or more of their income from thermal coal; or base 30 per cent or more of their operations on thermal coal; extract more than 20 million tonnes of thermal coal per year, or have the capacity to generate more than 10,000 MW of electricity from thermal coal may be excluded.

Conduct-based exclusions may also be applied as follows:

• serious or systematic human rights violations such as murder, torture, deprivation of liberty, forced labour, the worst forms of child labour and other child exploitation;
• serious violations of the rights of individuals in situations of war or conflict;
• the sale of weapons to states engaged in armed conflict that use the weapons in ways that constitute serious and systematic violations of the international rules on the conduct of hostilities
• the sale of weapons or military materiel to states that are subject to investment restrictions on government bonds as described in section 2-1(2)(c) of the Management mandate for the Norwegian Government Pension Fund Global
• severe environmental damage;
• acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions;
• gross corruption or other serious financial crime;
• other particularly serious violations of fundamental ethical norms.

Source: Guidelines for Observation and Exclusion of companies from the Government Pension Fund Global (GPFG)

• Complementary BlueBay Global Fixed Income Platform ESG screening for the Strategy (MSCI ESG)

Whilst the Fund seeks to ensure compliance with the exclusion list resulting from the NBIM SRI policy, BlueBay also independently replicates, where feasible, the NBIM SRI policy by applying ESG screening criteria sourced from a third-party provider to generate a complementary exclusion list, that aligns with the NBIM SRI policy. The rationale for this is to provide an additional and independent (third-party) perspective on what issuers would be excluded based on the ESG screening criteria of the NBIM SRI policy and also to seek to ensure we can continue to manage the portfolio according to the ESG screening criteria of the NBIM SRI policy in the event that NBIM discontinue publicly disclosing their exclusion list. The approach we have taken to managing the process for this is similar to some elements of the internal process employed to seek to comply with the NBIM SRI policy as detailed above. However, we would note that in some cases, we may choose not to apply ESG screening criteria that replicate some aspects of the NBIM policy, where we feel this would be detrimental to the Strategy, or where we are unable to source an appropriate screen from the third-party provider. In such cases, issuers excluded by the criteria of the NBIM SRI policy would continue to be restricted per the detail outlined above.

Essentially:

• We aim to comply with NBIM’s SRI policy, however we note that in some cases we go beyond these restrictions, e.g. coal and tobacco, and in others (as outlined above) may not meet;
• We source the data on excluded issuers (which cover product and conduct based ESG criteria aligned to the NBIM SRI policy) from a third-party ESG provider. We provide the third-party provider with the ESG criteria we have identified to be relevant for the Strategy, which are then applied by the third-party provider to their investment universe;
• On a monthly basis the third-party provider provides BlueBay with an updated list of issuers with involvement in the applicable areas, where we have been able to source an appropriate screen/have chosen to do so vs the criteria of the NBIM SRI policy.

Our Investment Policy function applies the new restricted list to the Strategy, by coding it into the investment trading system.

Process:

BlueBay Global Fixed Income Platform (BlueBay) has one investment team operating a single investment process across all asset classes. There are 3 intrinsic building blocks to the investment process: Product Design, Alpha Source Decisions and Portfolio Construction.

Product Design

Every portfolio managed at BlueBay has a Product Design, which documents a benchmark, an alpha target (or an absolute return target), the alpha sources expected to contribute to the strategy’s outperformance, and an expected risk contribution and liquidity profile. Based on the inherent properties of the alpha sources, ranges for typical maximum and minimum risk exposures are inferred, which act as internal exposure constraints.

The BlueBay Global High Yield ESG Debt Fund is designed to invest in high yield bonds globally combined with environmental, social and governance (ESG) criteria.

Below we provide an illustrative product design and risk budget for the BlueBay Global High Yield ESG Debt Strategy:

• Term Structure, Alpha Target 20 bps with a range of 0-20%. The risk measure is interest rate duration Yield curve with a target exposure of +/-2.0 years.
• Credit Beta, Alpha Target 40 bps with a range of 0-40%. The risk measure use is Corporate Spread duration with a target exposure of +/-2.0 years.
• Credit Alpha, Alpha Target of 140 bps, with a range of 60-100%. The Risk measures used are Country, Sector, Issuers and Instrument with a target exposure of 120-160 issuers.
• Currency, with an Alpha range of the portfolio being fully hedged. The risk measure is currency with a target exposure of being fully hedged.

Overview of High Yield Security Selection

With regard to specific credit selection, BlueBay’s high yield debt issuer selection is primarily qualitative, driven by proprietary research involving a detailed analysis of screened credits. The credit screening process provides us with an in-depth understanding of the company's business, capital structure and the risks associated with a potential investment.

Stage 1: Idea Origination

Investment ideas are generated by all members of the investment team and originate from deep and long-established relationships with investment banks, local and international advisory firms and external research providers. BlueBay has a well-established reputation for undertaking comprehensive due diligence and providing arrangers and underwriters with invaluable feedback and structuring advice. As such arrangers and originators are typically very keen to receive BlueBay’s input and consequently, we have access to an unrivalled supply of investment opportunities.

Stage 2: Preliminary screening

During the second stage of the BlueBay Global High Yield ESG Debt Strategy’s investment process, we carry out two complementary components which are part of the preliminary screening process of the potential investment universe:

1. Quantitative investment-based screening

The Strategy’s global high yield investment universe comprises approximately 1500+ issuers including:

• All securities within the preferred benchmark, the ICE BofA Global High Yield Investment Grade Country Constrained Index; and
• Other names which meet our investment criteria but may not be part of the index (e.g. unrated issues).

The universe is initially screened using two quantitative screening criteria. We aim to invest in securities with a minimum of two market makers per security, and a minimum issue size of USD250 million. Once the investment universe is established, the portfolio managers and analysts screen new opportunities that meet our minimum threshold requirements using a qualitative process. Investment ideas are sourced from proprietary research which utilises external sources such as third-party research, trade publications, the press and primary issuance documentation. The screens applied to the universe are: liquidity (size of the issue, number of market makers), financial transparency of the issuer, stability of the industry and access to company management. We only invest in companies with which we have an ongoing and sustainable bilateral relationship with the senior management team. If this cannot be established, or circumstances change to preclude its continuation, we will disinvest.

2. Qualitative ESG-based screening - ESG negative screening includes two elements:

ESG negative screening (product based):

• Corporates 1,2
  • adult entertainment (>10% revenues – production/distribution/retail),
  • alcohol (>10% revenues – production/distribution/retail),
  • controversial weapons (any production, sales/trade, testing, research and development, system integration, maintenance, maintenance/service/management, use, storage and transport of cluster munitions and anti-personnel landmines, chemical & biological weapons. Any producers of depleted uranium and nuclear weapons, undetectable fragmentation weapons, incendiary weapons and blinding laser weapons),
  • conventional weapons (>10% revenues – production of systems and components),
  • fossil fuels related (Arctic drilling (0% revenues) / oil & gas extraction & production (>5% revenues) / oil sands exploration & production (0% revenues) / >10% revenues – exploration, extraction, distribution or refining of oil fuels / >50% revenues – exploration, extraction, manufacturing or distribution of gaseous fuels / thermal coal - mining/power generation* (>10,000 MW installed capacity / >5% revenues/operations / electricity generation with a GHG intensity of >100g CO2e/kWh, >1% revenues – exploration, mining, extraction, distribution or refining of hard coal & lignite),
  • gambling (>10% revenues – operations/support),
  • nuclear energy* (>5% revenues – mining/production/supply),
  • tobacco (0% production & cultivation, >5% revenues – distribution/retail)

Normed based screening (conduct-based)

• Corporates 1,2 compliance with UN Global Compact principles (fail), compliance with OECD MNE Guidelines (non-compliance) ESG controversy exposure (red flag)
• Sovereigns 1,3: controversial jurisdictions (Financial Action Task Force (high risk), UN Security Council Sanctions (subject to)), Freedom House Index (‘not free’), UN conventions and treaties: corruption convention (not party to) / torture and punishment convention (not party to/no action/not ratified) / Paris Agreement (no action/not ratified)

Notes: Source: RBC Global Asset Management, as at 1 April 2025.

1. As determined by third-party ESG data. Further information is available upon request;
2. As determined by a third-party organisation. Further information is available upon request;
3. As determined internally by Investment Compliance. Further information is available upon request;
4.  As determined by an internally derived issuer ESG evaluation framework. Fundamental ESG (Risk) Rating is assigned at an issuer level. This relates to an assessment of the extent to which the issuer is effectively managing the key ESG risks it faces. Categories range from 'very high' ESG (Risk) Rating to 'very low' ESG (Risk) Rating and is a function of the ESG risk profile of an issuer and how well it manages these risks. Further information is available upon request;
5. Excludes issuers with 'very high' Fundamental ESG (Risk) Rating and excludes issuers with 'high' Fundamental ESG (Risk) Rating (case by case);
6. In certain instances, including but not limited to those involving quantitative investment, passive and certain third-party sub-advised strategies, there is no engagement with issuer;

* Exceptions permitted in specific instances for power utility companies in the case of transmission/distribution/capacity thresholds.

Once screened versus the above exclusions, a reduced universe of potential investments is evaluated during the subsequent stages of our investment process to determine absolute and relative attractiveness.

Stage 3: Pre-investment credit & ESG due diligence analysis

The research effort at stage three focuses on a reduced universe of 350+ issuers. This analysis is carried out by the individual credit research analysts (with support from our Responsible Investment (RI) team where necessary and appropriate) and culminates in research papers with a financial model highlighting key credit risks and relevant ESG risks. The in-depth research of each credit combines:

1. Credit Analysis

The credit analysts perform in-depth financial analysis of each issue focusing on:

a) Transaction review – We seek to establish an understanding of the underlying transaction that gave rise to the high yield issue. In particular, we seek to understand the sources and uses of monies, as different uses can be associated with a significantly different risk profile and therefore demand different return requirements.

b) Operating review – Historical levels of operating performance are assessed, in conjunction with the competence and the openness of management. We ascertain our level of comfort with regards to the company’s competitive positioning and industry dynamics. Key areas of analysis include historic organic free cash flow generation, stability of margins, volatility of earnings, barriers to entry, industry trends and market share.

c) Cash flow analysis – An important area of analysis where we focus on the company’s ability to meet scheduled interest payment and debt amortisations, by employing on-going and regular scenario analysis and stress testing in different macro and industry environments. We assess the level and stability of cash flow generated by the company's operations, and we evaluate the overall liquidity profile and its ongoing access to capital. The evaluation process is specific to each individual issuer as cash flow inputs differ from company to company.

d) Capital structure – We examine the company's balance sheet, focusing on an issue’s position within the capital structure. Specifically, we seek to determine our level of legal seniority versus other debt, review any collateral and assess our overall covenant protection. Our principal focus is on the level of equity capital, which is assessed using debt/earnings and enterprise value/debt ratios, as we need to ensure there is a substantial equity cushion beneath us.

e) Covenant review – A detailed understanding of the legal documentation underpinning the debt issue is crucial to our analysis. Specifically, we are focussed on the issuers’ ability to subordinate us as bond-holders by raising future debt or divesting of assets which are current sources of security. Each of our credit analysts is highly experienced in this type of assessment and we consider this fundamental to our analysis. Should it be required we have on desk legal support for further review and consideration and in addition we actively utilise external subscription-based analysis to supplement our own internal work.

f) Management engagement – As noted we will not lend to a company unless we have met with senior management and their equity sponsor should they have one. Such interaction is crucial in determining our alignment with the intentions of the owners of the business. Establishing a relationship with senior management at this stage of the process is also crucial for the ongoing monitoring of our investment.

We also determine the extent to which our interests as bondholders are aligned with the equity sponsors and management.

2. ESG Analysis

We may consider ESG risks as a part of our credit assessment 1. BlueBay has an issuer ESG evaluation framework 2 for (both corporate and sovereign) issuers that is led by our investment professionals (credit analysts in most instances), with input from the RBC GAM RI team members.3 The credit analyst will utilise a range of both external and internal ESG data and insights to form an opinion of the issuer’s oversight and management of ESG factors and to what extent this could be investment material. Whilst we consider the perspectives and assessment of the issuer by other stakeholders, we believe it is critical we formulate our own independent views.

Where the issuer ESG evaluation framework is conducted it results in the generation of two proprietary ESG metrics:

• A Fundamental ESG Risk Rating4 which indicates our view of the ESG risks/opportunities faced by an issuer (resulting from the risk exposure it faces and the quality of mitigation efforts). There can only be one Fundamental ESG (Risk) Rating per issuer across BlueBay. This Fundamental ESG (Risk) Rating is assigned the credit analyst(s), with input from the RI team as and when relevant and appropriate.
• An Investment ESG Score 5 which reflects our investment view on the extent to which the ESG factors are considered relevant to valuations, as well as the nature of that materiality (e.g. whether it’s likely to be positive, negative, neutral/no impact). This is a security/instrument specific assessment and as such there may be multiple Investment ESG Scores for a single issuer depending on the held security. In this way we can allow for different ESG investment materiality over varying time frames and risk-reward profiles. The Investment ESG Score is assigned by the credit analyst/portfolio manager.

The two ESG metrics aims to enable credit and RI analysts to express their ESG view on an issuer and indicate the extent to which this is likely to have an impact on the issuer’s credit quality. BlueBay’s Portfolio Managers can leverage the data and insights resulting from the issuer ESG evaluation within portfolio construction decisions and understand ESG investment risk exposure at the portfolio level.

Notes:

1 Certain investment strategies, asset classes, exposure and security types do not integrate ESG factors, including but not limited to money market, buy-and maintain, passive, and certain third-party sub-advised strategies or certain currency or derivative instruments. Different strategies that integrate ESG factors will be at varying stages of implementation.

2 ESG evaluations are only completed for in scope strategies, for specific issuer and security/instrument types and certain investment exposures.

3 The RI team is a centralised function within RBC GAM whose primary responsibility is to lead responsible investment activities and stewardship activities across the firm. This includes supporting ESG integration by providing investment teams with ESG-related research and education, maintaining vendor relationships, and updating teams on new tools, evolving trends, and best practices related to ESG integration. For the BlueBay platform’s ESG integration approach, the RI team has a direct involvement in reviewing ESG analysis, with the review being undertaken on a risk-based approach and/or dependent on the strategy in question. Further information is available upon request.

4 Fundamental ESG (Risk) Rating is assigned at an issuer level. Categories range from 'very high' ESG (Risk) Rating to 'very low' ESG (Risk) Rating and is a function of the ESG risk profile of an issuer and how well it manages these risks.

5 Investment ESG Score refers to the extent to which the ESG risk factors the issuer is exposed to are considered to have any financial/investment relevance and materiality. Scores range from ‘+’3’ through to '-3' indicates the extent to which ESG is considered investment material, as well as the nature and likely magnitude of the investment impact. An ‘Indicative’ Investment ESG Score is the assigned score at the time of initial ESG analysis and is more reflective of issuer level investment materiality of the ESG risks as there is not necessarily a specific security being considered for investment. For this reason, the actual ‘security’ level Investment ESG Score assigned for a specific investment may be different from the indicative one assigned, as that is more reflective of the view of ESG risks at an issue/instrument level.

The issuer ESG metrics (where ESG evaluations are applicable to the investment) are recorded appropriately and are fed into the Alpha Decision Tool1 (ADT), an in-house platform which enables investment teams to capture and monitor trade ideas. In addition, all credit and ESG research is stored together in our central in-house research platform, the Alpha Research Tool2 (ART). ESG data and insights also feed through to Portfolio Insight3 (Pi), another proprietary tool enabling our investment teams to view ESG metrics for their portfolios and associated benchmarks.

For further details of this process please see the RI section below.

Notes:

1 A proprietary tool developed by BlueBay to document investment ideas, decision making and investment outputs. The Fundamental ESG (Risk) Rating and Investment ESG Score feed into ADT.

2 A proprietary tool developed by BlueBay to document credit and ESG research and engagements. ESG analysis is a component of the fundamental credit analysis. The in-house issuer ESG evaluation process builds on third party ESG data and leverages off internal knowledge. ART stores the Fundamental ESG (Risk) Rating and Investment ESG Score for each in scope issuer.

3 A proprietary portfolio management tool developed by BlueBay which includes ESG, risk and performance data.

3.Relative value and absolute risk and return

Once we have a clear understanding of issuer risks and have identified those credits that offer fundamental value, we then seek to determine how attractive the expected return is relative to other similar opportunities in the same industry and across the entire market. The most important relative value analysis is intra-capital structure, in which we assess which debt instrument within a single company’s capital structure offers the best risk adjusted returns, i.e. bank debt, bonds, credit default swaps (CDS), convertible securities, etc. This process is overlaid by an absolute minimum return requirement for each individual credit based on our knowledge of the market, industry and similar credits.

As part of the due diligence process the credit analysts are required to score each issue based on fundamentals (including ESG), valuations, and technical factors on a +3 (most bullish) to -3 (most bearish) scale, dependent on their expected impact on repricing of the alpha source. These scores then help inform the overall investment conviction score, which is expressed on the same +3 to -3 scale and is reflected for every alpha source in our proprietary Alpha Decision Tool (ADT). By using the same scoring system for all investment decisions made at BlueBay, we are able to design investment solutions that meet our client’s needs and span various asset classes.

Alpha specialists are expected to maintain their investible conviction score in the ADT, along with a target and loss review level, an investment summary rationale and an assessment of risk factor associated with their investment idea. They are also expected to make regular comments relating to changes in conviction, alpha source behaviour, significant newsflow or changes in target / loss review levels.

Each credit is reviewed by the team’s Investment Committee which comprises the portfolio management team, members of the trading team, the lead analyst and anyone else within the investment team that may provide insight or counsel. The investment committee considers the merits of the investment in question using the research paper produced by the analyst as a starting point only. Often the process at this stage is an interactive one whereby issues raised by the investment committee will require further discussion and interaction with company management before a decision can be made. The decision to invest is a collective one made by the members of the committee – it is highly likely that this will be a unanimous decision

Additionally, each potential investment is reviewed in the context of five broad perspectives:

• Consistency with strategic and top down objectives – credit risk profile, relative value, sector weightings and investment horizon;
• Macro perspective – geographic concentrations, duration issues and other risk assets;
• Market technicals – supply vs. demand, fund flows and participants;
• Prevailing tactical investment themes – preference for high versus low beta securities, tactical sector positioning (e.g. cyclicals vs. staples); and,
• Compliance with the investment and regulatory guidelines, including position limits, issue domicile, currency and ratings.

The decisions regarding the selection of individual credits within the portfolio are taken by the portfolio managers during stage four of the process, portfolio construction.

Stage 4: Execution/portfolio construction

The final portfolio is constructed by the portfolio managers drawing on the product design combined with the research produced during the initial stages of the investment process. Every Strategy and portfolio utilise the Alpha Source Conviction Scores stored in the ADT in conjunction with the Product Design, in order to determine portfolio positioning. Position sizing is assisted by proprietary Quantitative Tools in order to achieve a degree of consistency in position sizing. The objective of Portfolio Construction is to make optimal use of Alpha Source outputs (+3 to -3), in light of the product design, while taking into account risk inputs, including liquidity scores and portfolio sensitivities. It is also an objective to minimise alpha slippage in implementation. Put simply, the alpha is being generated by the investment specialists and the aim of portfolio construction is to get as much of that alpha into portfolios as possible, while controlling risk.

BlueBay’s Portfolio Managers are empowered to leverage the data and insights resulting from the issuer ESG evaluation within portfolio construction decisions and understand ESG investment risk exposure at the portfolio level. For instance, where the ESG signal (Fundamental ESG Rating and Investment ESG Score) are negative, it may guide the Portfolio Manager to be cautious in their asset allocation for that issuer, potentially limiting exposure or follow up with the analysts to understand the reasons. In the opposite case, if the ESG data points are positive, it guides the Portfolio Manager to consider a greater tilt in allocation to these securities in the portfolio (e.g. Overweight vs the benchmark, larger positions, a core holding etc.). In addition, Very High ESG risk’ issuers are automatically excluded from this Strategy, whilst ‘High ESG risk’ issuers are excluded on a case-by -case basis. The majority of the alpha delivered in our portfolios is typically derived from our alpha sources while the remaining components are attributable to portfolio construction decisions.

While the portfolio construction stage incorporates quantitative aspects such as position limits, geographical concentration, etc., the portfolio managers’ judgment with regard to tactical themes and instruments used adds a qualitative input. It should be noted that bottom-up security selection (with a focus on risk-adjusted returns) blended with top-down macro drivers work together to create an optimised portfolio that can perform in all environments.

The tools used to construct the portfolio include fixed income securities, convertible securities, cash pay securities, zero coupon/payment in kind notes, single issuer CDS (long and short) and market index CDS products. It should be noted that the vast majority of the portfolio is comprised of sub-investment grade cash bonds and other instruments are used only on a highly selective basis. The final portfolio is notably more concentrated than the benchmark and typically includes 120-160 issuing companies.

A large portion of the portfolio is typically represented by companies that exhibit low levels of cyclicality, display transparent earnings streams, predictable cash flows and have good equity cushions with strong covenants and quantifiable security.

Additionally, the portfolio may invest in securities or issuers of a more opportunistic nature. Typically, these securities are those where the investment thesis is predicated on the occurrence of a particular event or turnaround at the issuer or wider sector within which the issuer resides. Often these issuers will be in more cyclical sectors such as retail, autos or chemicals. Our exposure to opportunistic securities will often depend on the point in the credit cycle which will typically dictate both the quantum of opportunities available and the valuations of these opportunities. Typically, opportunistic investments are sized more conservatively, and their holding period may well be shorter than those issuers considered to be less cyclical in nature.

We are mindful of trading activity and trading portfolio positions typically occurs when a new alpha source decision is introduced, or there has been a change in an existing alpha source decision. Trading can also result from cash flow into / out of a portfolio, new issue of securities, a perceived change in volatility, or as a result of an overall portfolio risk increase / reduction.

Portfolio construction and trading are at all times governed by our policies related to side-by-side management of similar portfolios, aggregation and allocation of trades as well as order execution policies. Compliance with investment and regulatory guidelines is reinforced by our compliance monitoring process undertaken through the Charles River Investment Management System (Charles River) Portfolio risk is monitored on an absolute basis by BlueBay’s Risk and Performance Team using our risk management system, S&P Global Market Intelligence.

With regards to ESG analysis, following the initial full ESG evaluation of an issuer, investment professionals (primarily credit analysts) will continue to monitor and update our records with new ESG insights as and when appropriate, including when ESG engagement activities have taken place. Wherever possible we seek to ensure there is a formal issuer ESG review every two years for held investments, although it can be initiated sooner where there is sufficient cause to question the ongoing validity of one of the metrics assigned, namely the Fundamental ESG (Risk) Rating. In this way, we aim to ensure our issuer ESG assessment remains relevant and accurate. This is a collaborative effort between our RBC GAM Responsible Investment function and the BlueBay investment teams, primarily led by the credit analyst covering the sector/region.

There is oversight of some aspects of the RI framework by the BlueBay Market Risk Committee1 as well as the BlueBay ESG Investment Working Group (IWG)2. The RI team may be involved in supporting the Market Risk Committee and the ESG IWG also interact with investment risk colleagues, utilising investment exposure data, as well as conducting ad-hoc ESG analysis as deemed appropriate.

Notes:

1 The BlueBay Market Risk Committee (MRC) provides oversight on investment risk related matters, bringing together investment risk and portfolio management professionals together to ensure effectiveness of the risk management framework and its processes.

2 The BlueBay ESG IWG is charged with the oversight of, and ensuring ESG incorporation among investment teams and is primarily comprised of representatives from each of the different investment functions. The ESG IWG sets a work programme annually, with progress against these monitored at each meeting.

Stage 5: Monitoring & Engagement

Ongoing post investment monitoring and engagement is an integral part of the investment process. Activities included in this stage include:

• Monthly/quarterly financial / ESG information analysis
• Management review meetings
• Re-appraisal on any relevant news flow
• Top down sector analysis and trends
• On-going re-assessment of sustainability/capital preservation
• Re-appraisal of relative value and risk adjusted returns offered

Following the initial full ESG evaluation of an issuer, analysts will continue to monitor and update our records with new ESG insights as and when appropriate, including when ESG engagement activities have taken place. ESG analysis is at the heart of our investment process and is ongoing in nature. A full deep dive re-working of the ESG analysis is formally scheduled within a 2-year period but we may initiate a full ESG review of an issuer before the formal review is due, where we have sufficient cause to question the ongoing validity of the assigned ESG ratings and scores which may occur as a result of an event or incident which leads us to query the nature of the issuer’s ESG practices and performance. In this way, we ensure our ESG assessment remains relevant and accurate at all times and it means we can systematically identify and manage ESG incidents that may arise and take appropriate action. This is a collaborative effort between our ESG investment specialists and our investment specialists, primarily with the credit analyst covering the sector/region.

BlueBay maintains a firm-wide database that supports the formal tracking of engagements, including ESG. This allows us to document and monitor engagement efforts and evaluate our effectiveness across our strategies. These data points feed through the issuer ESG evaluation engagement section of the Alpha Research Tool (ART), as well as our internal monitoring platforms, Portfolio Insights (Pi).

As part of the routine investment research process, our investment teams also do meet issuers (particularly with primary issuances) and are able to raise questions, including on ESG related matters. BlueBay may proactively initiate dialogue with issuers on ESG matters, or reactively in response to an external event or development. This is particularly relevant where there is a significant incident and we wish to gain greater understanding around how it came to pass and what measures are being implemented as a result. The outcome of ESG engagement efforts (e.g. the degree to which we are reassured and/or successful in our change facilitation efforts) represents an input into our investment thinking and decisions, and can influence whether we have exposure to an issuer, the nature of our positioning and / or whether further action is required. Engagements can be used to gather additional insights into the issuer’s ESG practices or to facilitate change by setting out a request for change/improvement in specific ESG areas.

Responsible Investment Approach

RBC BlueBay’s responsible investment (RI) approach for the BlueBay global fixed income platform (BlueBay) is based on our belief that ESG factors, and specifically ESG risks, are relevant to the returns of the assets we manage as they can potentially have an impact on an issuer’s long-term financial performance and could cause an actual or potential material negative impact on the value of investments. Given the limited upside and potentially significant downside of fixed income investments, the focus of ESG analysis is on understanding downside risks. We believe poorly managed ESG risks can lead to inefficiencies, operational disruption, litigation and reputational damage, which may ultimately impact an issuer’s ability to meet their financial responsibilities. As such incorporating ESG analysis (in particular ESG risks) into traditional financial analysis by reviewing ESG-related management practices and performance is in line with BlueBay’s fiduciary duty to optimise investor returns, as it is in the best interests of investments and portfolios.

The RBC Global Asset Management (RBC GAM)’s Approach to Responsible Investment, which applies to assets managed by RBC BlueBay, including those on the BlueBay platform, is available via our website: approach-to-responsible-investment.pdf (rbcbluebay.com).

On a platform level, BlueBay utilises a range of RI investment strategies to varying extents across our in-scope assets, including:

• ESG integration 1 : this is the ongoing incorporation of material ESG factors into investment decision-making with an aim to identify potential risks and opportunities and improve risk-adjusted, long-term returns. Our investment teams incorporate material ESG factors into their investment decisions for applicable types of investment.
• Active stewardship: we consider material ESG factors in proxy voting and engagement2 with issuers for applicable types of investments. We may also participate in RI industry initiatives, where applicable.
• ESG screening & exclusion: applying positive or negative screens to include or exclude assets from the investment universe. A product-based restriction is in place for all BlueBay pooled funds, in accordance with BlueBay policy on controversial weapons Investment. Depending on the strategy and portfolio there may also be additional exclusionary screens in place.

In terms of ESG integration, at the issuer level, BlueBay has an issuer ESG evaluation framework for both corporate and sovereign issuers that is led by our credit analysts, with input from the fixed income members of RBC GAM RI team members.3 The issuer ESG evaluation framework results in the generation of two proprietary ESG metrics 4 :

• A Fundamental ESG Risk Rating: this is assigned at an issuer level. Categories range from 'very high' ESG (Risk) Rating to 'very low' ESG (Risk) Rating and is a function of the ESG risk profile of an issuer and how well it manages these risks. There can only be one Fundamental ESG (Risk) Rating per issuer across BlueBay. This Fundamental ESG (Risk) Rating is assigned the credit analyst(s), with input from the RI team as and when relevant and appropriate.
• An Investment ESG Score: this refers to the extent to which the ESG risk factors the issuer is exposed to are considered to have any financial/investment relevance and materiality. Scores range from ‘+’3’ through to '-3' indicates the extent to which ESG is considered investment material, as well as the nature and likely magnitude of the investment impact. An ‘Indicative’ Investment ESG Score is the assigned score at the time of initial ESG analysis and is more reflective of issuer level investment materiality of the ESG risks as there is not necessarily a specific security being considered for investment. For this reason, the actual ‘security’ level Investment ESG Score assigned for a specific investment may be different from the indicative one assigned, as that is more reflective of the view of ESG risks at an issue/instrument level. This is a security/instrument specific assessment and as such there may be multiple Investment ESG Scores for a single issuer depending on the held security. In this way we can allow for different ESG investment materiality over varying time frames and risk-reward profiles. The Investment ESG Score is assigned by the credit analyst/portfolio manager.

Notes:

1 Certain investment strategies, asset classes, exposure and security types do not integrate ESG factors, including but not limited to money market, buy-and maintain, passive, and certain third-party sub-advised strategies or certain currency or derivative instruments. Different strategies that integrate ESG factors will be at varying stages of implementation.

2 In certain instances, including but not limited to those involving quantitative investment, passive and certain third-party sub-advised strategies, there is no engagement with issuers. A variety of engagement methods may be employed depending on a number of different factors and considerations (e.g. depending on the issuer, the matter being discussed, the accessibility of the issuer etc.). Investment teams select the engagement method they believe to be most appropriate and effective for their desired engagement objective. Where there is an engagement activity, this is not necessarily limited to/solely for: issuer engagement, engagement to promote change, or occur for all applicable holdings in portfolios. The outcome of an engagement is generally not the sole factor in an investment decision. Instead, the information obtained from engagements on material ESG factors helps inform the investment case.

3 The RI team is a centralised function within RBC GAM whose primary responsibility is to lead responsible investment activities and stewardship activities across the firm. This includes supporting ESG integration by providing investment teams with ESG-related research and education, maintaining vendor relationships, and updating teams on new tools, evolving trends, and best practices related to ESG integration. For the BlueBay platform’s ESG integration approach, the RI team has a direct involvement in reviewing ESG analysis, with the review being undertaken on a risk-based approach and/or dependent on the strategy in question. Further information is available upon request.

4 ESG evaluations are only completed for in scope strategies, for specific issuer and security/instrument types and certain investment exposures.

The two ESG metrics enable credit and RI analysts to express their ESG view on an issuer and indicate the extent to which this is likely to have an impact on the issuer’s credit quality. Furthermore, the decision output from this analysis can input into the portfolio construction phase of the investment process.

Consideration of ESG sectoral/regional issues & themes
Complementing issuer level ESG analysis, is scope for conducing ESG analysis which is more geared towards sectors, regions and/or themes. On the corporate side, where we have credit analysts across different investment teams covering the same sector/industries, we work to promote a joined up and consistent level of understanding and knowledge, whilst also being able to highlight particular areas of differences in dynamics, challenges or opportunities. Issue or thematic ESG analysis may also be conducted and supports the ability to identify global, cross-cutting, ESG risks which may not necessarily be apparent when taking a more narrow issuer or sectoral focus.

Dynamic monitoring and engagement
Ongoing post investment monitoring and engagement is part of the investment process. Following the initial full ESG evaluation of an issuer, credit analysts will continue to monitor and update our records with new ESG insights as and when appropriate, including when ESG engagement activities have taken place. There is a formal issuer ESG review every two years, although it can be initiated sooner where there is sufficient cause to question the ongoing validity of one of the metrics assigned, namely the Fundamental ESG (Risk) Rating. In this way, we seek to ensure our issuer ESG assessment remains relevant and accurate. This is a collaborative effort between our RBC GAM RI function and the BlueBay investment teams, primarily led by the credit analyst covering the sector/region.

As part of the routine investment research process, our investment teams meet issuers (particularly with primary issuances) and can raise questions. Given BlueBay’s focus on ESG integration, actions to mitigate investment relevant ESG risks are raised by investments teams, where considered necessary and appropriate. BlueBay maintains a platform-wide database for formally tracking engagements1 , including ESG. This allows us to record and monitor engagement efforts and evaluate our efforts across our Strategies. These feed through the issuer ESG evaluation engagement section of the Alpha Research Tool (ART), as well as our internal monitoring platforms, Portfolio Insights (Pi).

BlueBay manages Environmental, Social and Governance (ESG) factors within its responsible investment framework for in-scope managed assets (which may include pooled funds and segregated accounts). The platform makes use of a range of RI strategy components, including ESG integration and engagement (for in-scope assets and investments, further information is available upon request), ESG screening and exclusion (for instance the pooled funds apply an exclusion policy on controversial weapons production, further information is available upon request), and proxy voting (where applicable, further information is available upon request). BlueBay may consider ESG-related factors and risks at various levels of the investment process, including issuer specific, sector, portfolio and platform-wide. ESG risks are considered tat different stages of the investment process. BlueBay uses a combination of external and internal, open access and fee-paying ESG data resources to support its efforts. There is oversight of some aspects of the RI framework by the BlueBay Market Risk Committee as well as the BlueBay ESG Investment Working Group. BlueBay communicates publicly about its RI investment efforts, on the website www.rbcbluebay.com, as part of reporting under RBC GAM. In certain instances, additional private ESG reporting is available to segregated account clients.

Note:

1 It is likely the data provided may understate our actual instances of ESG engagement as not all engagements are necessarily documented (e.g., ESG was not a material part of the discussion, or because documentation is conducted on a best-efforts basis).

External ESG Data

BlueBay utilises data from a number of specialist third-party providers and utilises other ESG data related products and services from external providers.

These tools may be used as part of BlueBay’s ESG risk assessment of issuers, as part of sector analysis, and/or at strategy/portfolio level. In line with BlueBay’s active management philosophy, they are incorporated at both:

• Top-down macro level: analysing and evaluating trends and development at a global/regional/country level in terms of the political, legal and regulatory, environmental and social megatrends shaping the operating environment of governments and economic development, and which set the stage for corporate activities; and
• Bottom-up micro level: at the corporate level, this involves fundamental analysis and evaluation of ESG management and performance trends and developments for a given industry.

ESG related Portfolio Monitoring

ESG risk oversight is provided across BlueBay’s strategies and investment desks through continual analysis and monitoring of firmwide ESG risk exposure. This involves the ESG investment team interacting with investment risk colleagues, utilising investment exposure data, as well as conducting ad-hoc ESG analysis as deemed appropriate. The ESG Investment Working Group (IWG) is charged with the oversight of and ensuring ESG integration within our investment practices. The ESG IWG sets a work programme annually, with progress against these points monitored at each meeting.

Resources, Affiliations & Corporate Strategies:

In terms of third-party portfolio rating measurements, the BlueBay Global Fixed Income Platform sources issuer ESG data from a number of specialist third-party providers and utilises other ESG data-related products and services from external stakeholders to help in the ESG integration process, which are made available to the investment teams.

Specifically, we source issuer ESG data from specialist third parties:

• Corporates: MSCI ESG Research, RepRisk, NASDAQ, the Upright Project, Impact Cubed, Sustainalytics.
• Sovereigns: Verisk Maplecroft; MSCI ESG Research, Eurasia Group, NASDAQ.

Ultimately the external resources input into our views but do not define them. BlueBay Global Fixed Income Platform uses a combination of internal and external ESG data/ratings/insights to inform on our issuer ESG view, with a trend towards greater focus on our proprietary ESG insights, with the external data as inputs. Whilst we consider third-party insight to be a valuable input in terms of understanding ESG risks and insights, we believe it is critical that we develop our own views on an issuer’s ESG risk exposure. This is particularly pertinent in the case of issuers for which we have access to insights and other resources that go beyond those which data providers may be able to access. Where, however, we understand the methodology and basis for a third-party's views, we can incorporate them in an informed way.

RBC Global Asset Management (RBC GAM) Responsible Investment (RI) team

The RBC Global Asset Management (RBC GAM) Responsible Investment (RI) team is comprised of 15 dedicated full-time employees who sit within the investment platform. The RI team members have a mix of investment, ESG, risk management, data engineering, and legal expertise. Team members’ individual compensation is directly related to RBC GAM’s responsible investment and stewardship activities.

The Head of RI reports directly to the RBC GAM CIO and sits on a number of executive committees, including the RBC GAM Leadership Committee and the RBC Climate Steering Committee, which provides coordination on RBC’s climate strategy and its implementation.

As a centralised function, the RI team’s primary responsibility is to lead responsible investment activities and stewardship across the firm. This includes:

* Developing cohesive responsible investment strategies and policies for Leadership Committee approval, including our Approach to Responsible Investment. The Proxy Voting Guidelines are approved by the RBC GAM CIO and reviewed by the Proxy Voting Committee.

* Supporting ESG integration by providing investment teams with ESG-related research and education, maintaining vendor relationships, and updating teams on new tools, evolving trends, and best practices related to ESG integration. The RI team also reviews ESG integration processes across investment teams and supports the continuous improvement of practices and technology.

* Executing and managing RBC GAM’s proxy voting activities, including voting proxies and leading the annual review and update of the Proxy Voting Guidelines. RBC GAM generally votes in the same way across all internally-managed funds, in accordance with the Proxy Voting Guidelines. This function is centralised as we believe that the principles we apply in proxy voting are in the best interests of clients and unitholders invested in the portfolio issuers, with a view to enhancing their long-term value. The RI team reviews each vote individually and seeks input from investment teams on specific issues so that voting reflects the best interests of our clients in both systemic and issuer-specific matters.

* Participating in and leading collaborative initiatives on ESG-related issues with like-minded investors and national or international organizations/coalitions, where appropriate. The RI team also supports and participates in direct and collaborative engagements by liaising with investee companies and investment teams, where appropriate.

* Maintaining expertise on emerging ESG trends and material ESG issues, and preparing client reporting and thought leadership pieces related to RBC GAM’s RI activities and insights.

Governance
Our CIO, CEO, and relevant Boards of Directors oversee the performance of firm-wide strategic initiatives, including RI, on a quarterly and annual basis. Responsibility for strategic initiatives is delegated to the appropriate executives, whose direct annual compensation includes an assessment of performance on those initiatives. The RBC GAM Leadership Committee has identified the continued enhancement of ESG integration into the investment teams’ processes as a strategic objective for the firm.

Our RI and investment teams are responsible for the implementation of our Approach to Responsible Investment. As such, our RI team members’ individual compensation is directly related to RBC GAM’s RI and stewardship activities. Our investment teams are regularly evaluated on their teams’ ESG integration processes, including as one component of their annual variable compensation.

Specific executive management oversight responsibilities include:

• The CEO sets the strategic direction of RBC GAM and oversees the firm’s performance of all strategic initiatives and Approach to Responsible Investment. The CIO and the COO report to the RBC GAM CEO.
• The CIO oversees the investment strategies, policies, and performance across all affiliates. The heads of all investment teams and the RI team report to the CIO.
• The COO oversees all operational strategies, policies, risks, and initiatives across all affiliates.
• The Head of RI is responsible for all RI activities across RBC GAM, and for the implementation of these strategies by RBC GAM’s centralized RI team.
• The heads of global investment teams are responsible for the establishment and implementation of ESG integration processes for applicable strategies.
• The heads of the institutional and retail businesses oversee product development, with review by a Product Committee and oversight by the CIO and CEO. Review and input on new products is provided by the COO, the Head of RI, and members of the Investment Risk, Investment Policy, Compliance, and Legal teams.*

This governance structure was chosen to help ensure that the level of oversight of RI and stewardship is commensurate with its importance to RBC GAM’s overall business strategy. The combination of executive oversight and responsibility over these initiatives helps ensure that RI and stewardship is effectively executed and continuously improves.

*The product development and approval process at RBC BlueBay, which covers products distributed in Europe, the Middle East, and Africa (EMEA), and APAC, is governed by the EMEA/APAC Product Committee. Members of the committee includes the RBC BlueBay CEO, Chief of staff, CFO, COO, General Counsel, Head of Business Development, Head of Product Development, Conducting Officer for Distribution of the Luxembourg Management Company and the Chief Risk Officer. The GAM CIO and Chief Financial Officer also have oversight of any products approved by the EMEA/APAC Product Committee.

Biographies of the RI team members are provided below:

Melanie Adams
Melanie is managing director and head of the RBC GAM Responsible Investment team at RBC GAM and is based in Toronto. She is also a member of the RBC GAM Leadership Committee and its People & Culture Sub-committee. Her team supports RBC GAM’s investment teams in integrating environmental, social and governance (ESG) factors into their investment processes; engages in active stewardship; and provides meaningful client reporting on responsible investment. Melanie joined RBC GAM in 2014 and has also held roles in Fund Governance and Strategy. Prior to joining the firm, she had been senior legal counsel at BMO and enforcement counsel with the Ontario Securities Commission. She started her career in the investment industry in 2005.
JD, University of Toronto, Canada; BSc (Biology, Hons.), University of Waterloo, Canada.

Research & Policy

Maia Becker
Maia is a senior director on the RBC GAM Responsible Investment team at RBC GAM and is based in Toronto. In this role, she leads ESG research, policy and strategic initiatives that support delivery of RBC GAM’s approach to responsible investment across its three pillars: ESG integration, active stewardship, and client-driven solutions and reporting. Maia also leads RI team activities related to climate change, nature and biodiversity, and human rights. Maia first joined the Royal Bank of Canada (RBC) in 2016 as a director in RBC’s environmental and social risk management team, before joining RBC GAM in 2019. Prior to RBC, she spent over 10 years working with government and local and international non-profit organizations –including Metrolinx and Forest Stewardship Council Canada – on sustainability strategy, standards and certification, and sector-based initiatives. Maia started her career in the investment industry in 2016.
MBA (2014), Rotman School of Management - University of Toronto; Master of Forest Conservation, University of Toronto (2004); BSc (1999), Queen’s University, Canada; Certificate in ESG Investing, CFA; GHG Inventory Quantifier (GHG-IQ) and LEED® Accredited Professional (LEED AP).

Matt Carthy
Matt is a senior analyst on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in Toronto, supporting environmental, social and governance (ESG) research and policy initiatives. In this role, he works closely with the RI and other investment teams to provide insights and research on the integration of ESG factors into their investment approach, with a key focus on RBC GAM’s approach to climate change. Prior to joining the firm in 2013, Matt worked in the retail banking arm of RBC, which is where he started his career in 2010.
CFA (2017); BComm (Public Management) (2009), University of Guelph, Canada.

Sanja Sretenovic
Sanja is a Senior Analyst on the Responsible Investment (RI) team at RBC Global Asset Management (RBC GAM), focused on ESG research and policy initiatives. In this role, Sanja works with global investment and distribution teams to provide strategic advice, insights, and research on the integration of ESG factors into the investment approach. Prior to joining the team in 2019, Sanja worked at a large provincial investment management corporation, where she held multiple roles in cross-asset class strategic investment research, global thematic public equity investments, and ESG integration and stewardship. Sanja began her career in the investment industry in 2014.
CFA, BCom., McGill University

Equities

Derek Butcher
Derek is Director on the Responsible Investment (RI) team at RBC Global Asset Management (RBC GAM), responsible for assisting the investment teams with their ESG integration processes, participating in ESG engagements with issuers and overseeing the firm’s proxy voting. Prior to joining RBC GAM in 2015, Derek worked as a researcher for one of the world’s leading responsible investment research providers, conducting ESG research across markets and providing clients with customized responsible investment products. Derek serves on the Board of Directors of the Investor Stewardship Group, in addition to other responsible investment committees. Derek is a CFA® charterholder.
CFA (2019); MBA (2014), Odette School of Business, University of Windsor; MES (2012), Western University; BSc (Hons, 2010), University of Windsor, Canada

Nureen Nagra
Nureen is a senior analyst on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in Vancouver. In this role, she is responsible for various RI initiatives, including supporting investment teams with environmental, social, and governance (ESG) integration, conducting RI analysis and research, and executing on the firm’s proxy voting activities. Nureen joined the organization in 2015 and has worked with retail and institutional clients in varying roles. Prior to RBC GAM, she worked with institutional and high-net-worth clients at Raymond James Ltd. Nureen started her career in the investment industry in 2014.
CFA (2018); BComm (2013), University of British Columbia, Canada

Alan Weider
Alan is a senior analyst on the RBC GAM Responsible Investment team at RBC GAM and is based in London, U.K. In this role, he assists investment teams with the integration of environmental, social, and governance (ESG) considerations into the investment process, conducts analysis, and executes proxy voting activities for RBC GAM funds and client accounts. Prior to joining the team in 2022, Alan held a range of roles within RBC GAM and RBC Wealth Management globally, first joining RBC in 2015. He began his career in the investment industry in 2012.
CFA (2018); CFA UK Level 4 Certificate in Investment Management (IMC); CFA UK Certificate in ESG Investing; Diploma in Investment Management (ESG); Diploma in Regulated Financial Planning (Level 4), Personal Finance Society; MEng (Chemical Engineering) (2012), University of Birmingham, U.K.

Andrew Hakes
Andrew is an analyst on the RBC GAM Responsible Investment team at RBC GAM and is based in Toronto. In this role, he assists investment teams with the integration of environmental, social, and governance (ESG) considerations into the investment process, conducts analysis, and executes proxy voting activities for RBC GAM funds and client accounts. Prior to joining the firm in 2022, Andrew worked as a senior research associate at the Institute for Sustainable Finance and as an analyst at the Delphi Group, a strategic consultancy firm. He started his career in the investment industry with RBC GAM in 2022.
Master of Global Affairs (Global Capital Markets) (2018), University of Toronto; B.A. (Honours) (2016), University of Western Ontario.

Winnie Hu
Winnie is an analyst on the RBC GAM Responsible Investment team at RBC GAM and is based in Toronto. In this role, she assists investment teams with their ESG integration processes, proxy voting, and engagement efforts. Winnie joined the team in 2023, having earlier worked as an analyst on the RBC Global Fixed Income & Currencies team since 2021. As part of the role, she researched and traded interest rates products for global developed markets. Winnie started her career in the investment industry with RBC in 2019 as part of the Wealth Management Generalist program.
MBA (2019), Concordia University – John Molson School of Business, Canada; BA Political Science (2014), McGill University, Canada.

Fixed Income

My-Linh Ngo
My-Linh is a senior director & impact-aligned strategist on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in London, with lead responsibility for integration and stewardship of environmental, social, and governance (ESG) factors across the firm's global fixed income assets. She is also a sustainability strategist for the impact-aligned bond strategy managed on the BlueBay fixed income investment platform of RBC GAM-UK. My-Linh represents RBC GAM externally in a range of committees and working groups focused on driving RI best practice in the fixed income asset class. Prior to joining the firm in 2014, she worked with leading asset management firms, including Henderson Global Investors and Schroders Investment Management, focusing on the RI industry. My-Linh started her career in the investment industry in 2000.
CFA UK Level 4 Certificate in Investment Management (IMC) (2004); MProf (Leadership for Sustainable Development) (2000), Middlesex University/Forum for the Future, U.K; MSc (EIA, EMS, and Auditing) (1999), University of East Anglia, U.K.; BSc (Hons. Environmental Sciences) (1998), University of East Anglia, U.K.

Lucy Byrne
Lucy is a senior manager on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in London. In this role, she focuses on the incorporation of environmental, social, and governance (ESG) factors across the firm’s global fixed income assets. Lucy joined the firm in July 2018 as an ESG analyst and was promoted to the role of a senior ESG analyst in January 2020. Prior to RBC GAM, she was an assistant manager, Sustainability Services at KPMG UK, working with companies across a range of sectors and geographies, as well as investors, on their sustainability strategies and reporting and assurance activities. She started her career in the investment industry in 2018.
MSc (Environmental Technology) (2012), Imperial College London, U.K.; MSci (Environmental Geoscience) (2007), Imperial College London, U.K.

Ian Clark
Ian is a senior analyst on the RBC GAM Responsible Investment team at RBC GAM and is based in London, U.K. In this role, he is involved in the integration and stewardship of environmental, social, and governance (ESG) factors across the firm’s global fixed income assets, with a focus on climate. Ian is an experienced financial services management consultant, advising on strategy and transformation, and has been specializing in sustainability, ESG and climate change since 2018. Prior to joining the organization in 2023, Ian worked for eight years at consulting firm Baringa in various capacities, most recently as a senior manager (climate change consultant), having earlier worked for international financial services companies HSBC Global Banking and Markets and RBS among others. He started his career in the investment industry in 2006.
Business and Climate Change certification, University of Cambridge (CISL); Chartered Management Accountant (CIMA); BA (Hons, Accounting and Finance) (2003), De Monfort University, U.K.

Younes Hassar
Younes is a senior analyst on the RBC GAM Responsible Investment team at RBC GAM and is based in London. In this role, he is involved in the integration and stewardship of environmental, social, and governance factors (ESG) across the firm’s global fixed income assets, with a focus on macro/sovereign ESG. Prior to joining the firm in 2022, Younes held various in-house and consultancy roles, which have ranged from product management and macro analysis to ESG and sustainability-oriented roles, across leading financial services firms such as Federated Hermes, Aviva Investors, HSBC, and BNP Paribas. He started his career in the investment industry in 2008.
Master (International Business Management), SEKMA Business School, France; BSc (Economics), SEKMA Business School, France.

Emir Beganovic
Emir is an analyst on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in Minneapolis. In this role, he is involved in the integration and stewardship of environmental, social, and governance (ESG) factors across the firm’s global fixed income assets, with a particular focus on strategies managed in North America. Prior to joining the firm in 2022, Emir led the ESG program for the asset management division of Thrivent Financial, where he was responsible for supporting ESG integration into the investment process, coordinating activities and materials for the ESG and proxy voting committee, as well as updating and implementing proxy voting policies for the firm. Emir also has experience as an investment product manager, contributing to the development and execution of product strategy for the retail funds business, conducting manager due diligence, and providing sales and marketing support for fixed income strategies. Emir started his career in the investment industry in 2010.
CFA (2016); MBA (General Management) (2022), Northwestern University, U.S.; BA (Economics and German Studies) (2009), Macalester College, U.S.

Vibha Lad
Vibha is an analyst on the RBC GAM Responsible Investment (RI) team at RBC GAM and is based in London, supporting the integration and stewardship of environmental, social, and governance (ESG) factors across RBC GAM’s global fixed income assets. She moved to specialize in ESG investing as an ESG investment operations manager in 2022, supporting ESG data infrastructure and operational aspects of the BlueBay fixed income investment platform of RBC BlueBay. Prior to joining the firm in 2015 as a junior fund accountant, Vibha worked in the Banking & Capital Markets division at PwC. She started her career in the investment industry in 2014.
CFA UK Certificate in ESG Investing (2021); CIMA Diploma (Management Accounting) (2016); CFA UK Level 4 Diploma in Investment Management (2015); BSc (Economics) (Honours.; 2013), Brunel University London, U.K.

Source: RBC Global Asset Management, as at 5 April 2025.

Active stewardship
As stewards of our clients’ assets, we encourage the issuers in which we invest to act in alignment with the best interests of our clients.

We address topics such as board structure, executive compensation, gender diversity, and climate change with issuers and regulatory bodies, where material. We do this by employing the following three methods: proxy voting, engagement, and participating in collaborative initiatives.

Proxy Voting
Voting responsibly at the meetings of issuers in our portfolios is an important way we act in the best interest of our clients. We make each voting decision independently, in accordance with our Proxy Voting Guidelines (rbcgam.com). These custom guidelines provide an overview of the principles we support and how we will generally vote on particular issues. They are updated yearly to reflect our views on emerging trends in corporate governance and responsible investment. Our guidelines are applied for companies based in Canada, the United States, the United Kingdom, Ireland, Australia, and New Zealand. As stated in our guidelines, in all other markets, RBC GAM uses the local proxy voting policies of Institutional Shareholder Services (ISS).

Engagement
We believe that issuers that manage their material ESG risks and opportunities effectively are more likely to outperform on a risk-adjusted basis over the long term. Our approach to engagement reflects this belief, as we engage in dialogue with issuers over time and participate in initiatives that increase transparency and foster fair and efficient markets for the benefit of all investors and clients globally.

Our investment teams and RI team may meet with the issuers in which we invest on an ongoing basis. The specific ESG factors we engage on differ based on sector, asset class, and geography, as engagement cases are prioritized based on the materiality of the ESG issue to the specific investment. Teams may also prioritize their engagement efforts based on the size of the investment and/or the level of ESG risk within the portfolio. As a firm, we recognize that corporate governance and climate change are of particular relevance to us. We seek to understand each issuer individually and through the lens of local norms and the laws and regulations of the market(s) in which it operates.

Typically, the objectives of our ESG-related engagements include:

• information gathering on material ESG risks and opportunities and the steps the issuer is taking to address them;
• Seeking better public disclosure of material ESG risks and opportunities and the steps the issuer is taking to address them;
• Encouraging more effective management of material ESG factors, when we believe they may impact the value of the investment; and
• Where an issuer is lagging its peers on a material ESG issue, requesting a commitment for change, monitoring any changes, and encouraging continued improvements that are expected to positively impact the long-term value of the investment.

Industry Initiatives
We participate in initiatives that work to increase transparency, protect investors, and foster fair and efficient capital markets. We recognise that advocating for regulatory and legal reform can be more effective when market participants work together. Where interests are aligned, collaboration with like-minded investors can give us greater influence on issues specific to our investments and on broader, market-wide considerations. In either case, we work to encourage changes that are in the best interests of our clients.

30% Club Canadian Investor Group
Signatory since: 2018
RBC GAM is a signatory to the 30% Club Canadian Investor Group. The 30% Club Canadian Investor Group is a coalition of Canada’s largest institutional investors, which calls on publicly-traded companies to take prompt and considered action to achieve and exceed the 30% gender diversity target and to enhance the presence of other underrepresented groups on their boards and at the executive management level. The coalition has instigated numerous engagements, for which RBC GAM may engage, provide inputs, and/or provide feedback.

Alternative Investment Management Association
Signatory since: 2019
RBC GAM is a member of the Alternative Investment Manager Association (AIMA), the global representative of the alternative investment industry. AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives such as advocacy, policy and regulatory engagement, educational programs and sound practice guides. A member of RBC GAM’s RI team is on the Global Responsible Investment Committee.

Canadian Coalition for Good Governance
Signatory since: 2003
RBC GAM is a founding member of the Canadian Coalition for Good Governance (CCGG). CCGG promotes good governance practices in Canadian public companies and works to improve the regulatory environment to best align the interests of boards and management with their shareholders. Members of RBC GAM’s RI team serve on the Public Policy and Environmental & Social committees.

CDP
Signatory since: 2006
RBC GAM is signatory to CDP, formerly known as the Carbon Disclosure Project. CDP runs the global disclosure system that enables entities to measure and manage their environmental impacts.

Climate Action 100+
Signatory since: 2020
RBC GAM is an investor participant and signatory to Climate Action 100+ (CA100+). CA100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take appropriate action on climate change in order to mitigate financial risk and to maximize the long-term value of assets.

Climate Engagement Canada (CEC)
Signatory since: 2021
RBC GAM is a founding participant of Climate Engagement Canada (CEC). CEC is a finance-led initiative that drives dialogue between the financial community and corporate issuers to promote a just transition to a net-zero economy. A member of RBC GAM’s RI team is Chair of the Technical Steering Committee.

Council of Institutional Investors
Signatory since: 2013
RBC GAM is an associate member of the Council of Institutional Investors (CII). CII aims to promote effective corporate governance, strong shareowner rights and vibrant, transparent and fair capital markets.

Emerging Markets Investor Alliance
Signatory since: 2020
RBC GAM a member of the Emerging Markets Investors Alliance (EMIA). EMIA aims to enable institutional emerging market investors to support good governance, promote sustainable development, and improve investment performance in the governments and companies in which they invest.

Farm Animal Investment Risk & Return
Signatory since: 2020
RBC GAM is a member of the Farm Animal Investment Risk & Return Initiative (FAIRR). FAIRR is a collaborative investor network that raises awareness of the ESG risks and opportunities brought about by intensive livestock production.

FX Global Code
Signatory since: 2021
RBC GAM is signatory to the FX Global Code July 2021 (FX Global Code). The FX Global Code is a set of global principles of good practice in the foreign exchange market, developed to provide a common set of guidelines to promote the integrity and effective functioning of the wholesale foreign exchange market. It was developed by a partnership between central banks and Market Participants from 20 jurisdictions around the globe. The Global Foreign Exchange Committee promotes, maintains and updates the Code regularly. RBC GAM’s Head of Global Fixed Income & Currencies is a member of the Canadian Foreign Exchange Committee.

GIIN
Signatory since: 2018
BC GAM is a member of the Global Impact Investing Network (GIIN). The GIIN is the global champion of impact investing, dedicated to increasing the scale and effectiveness of impact investing around the world.

Green Bond Transparency Platform
Signatory since: 2021
RBC GAM is a supporter of the Inter-American Development Bank (IDB)’s Green Bond Transparency Platform (GBTP). The GBTP is an innovative open access digital tool that brings greater transparency to the Latin American and Caribbean green bond market and aims to provide a benchmark for best practice disclosure and support to all market actors.

International Corporate Governance Network
Signatory since: 2013
RBC GAM is a member of the International Corporate Governance Network (ICGN). ICGN aims to promote effective standards of corporate governance and investor stewardship to advance efficient markets and sustainable economies worldwide

IFRS Sustainability Alliance
Signatory since: 2019
RBC GAM is a member of the IFRS Sustainability Alliance, a global membership program for sustainability standards, integrated reporting, and integrated thinking. Upon the Value Reporting Foundation’s consolidation into the IFRS Foundation, the IFRS Foundation’s International Sustainability Standards Board (ISSB) assumed responsibility for the SASB Standards. The ISSB has committed to build on the industry-based SASB Standards and leverage SASB’s industry-based approach to standards development. The ISSB encourages preparers and investors to continue to use SASB Standards. A member of RBC GAM’s RI team is on the ISSB Investor Advisory Group (IIAG).

RBC GAM is also a signatory to the COP28 Declaration of Support for the ISSB’s Climate Standard. As such, we support the establishment of market infrastructure to enable consistent, comparable climate-related disclosures at a global level. RBC GAM has published a climate-related report guided by the recommendations of the TCFD since 2020. The TCFD recommendations are now incorporated into the ISSB’s Standards

The Investment Association
Signatory since: 2020
RBC GAM is a member of the Investment Association (IA). The IA is the United Kingdom’s membership association for investment managers.

Investors Policy Dialogue on Deforestation (IPDD)
Signatory since: 2020
RBC GAM is a supporting investor of the Investor Policy Dialogue on Deforestation (IPDD). The IPDD aims to coordinate a public policy dialogue with authorities and monitor developments to assess exposure to financial risks arising from deforestation. One of our investment teams co-chairs the IPDD Management Committee and the IPDD Brazil workstream and is a participant in the IPDD Indonesia workstream.

Japanese Stewardship Code
Signatory since: 2018
RBC GAM is a signatory to Japan's Stewardship Code (The Code). The Code sets out the principles that institutional investors should adhere to in order to fulfil their stewardship responsibilities to clients, beneficiaries and investee companies.

Mission Investors Exchange
Signatory since: 2014
RBC GAM is a member of Mission Investors Exchange (MIE). MIE is the leading impact investing network for foundations dedicated to deploying capital for social and environmental change.

Responsible Investment Association
Signatory since: 2003
RBC GAM is a sustaining member of the Responsible Investment Association (RIA). The RIA is Canada’s membership association for responsible investment. A member of RBC GAM’s RI team is the Chair of the RIA board. RBC GAM is a proud signatory to the Canadian Investor Statement on Diversity and Inclusion (read the full statement) and the Canadian Investor Statement on Climate Change (read the full statement).

Transition Pathway Initiative
Signatory since: 2020
RBC GAM is a supporter of the Transition Pathway Initiative (TPI), focused on better understanding how companies are managing the transition to a low carbon economy. TPI seeks to provide academically robust and independent assessments of how companies are transitioning in line with the Paris Agreement. TPI provides open access data that supports investors in understanding the climate transition, and works with Climate Action 100+ to provide data for the net zero benchmark.

UK Stewardship Code
Signatory since: 2011
RBC GAM is a signatory to the UK Stewardship Code 2020 (the Code). The code aims to enhance the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns to shareholders. RBC GAM’s 2023 Annual Stewardship Report met the expected standard of reporting of the Financial Reporting Council (FRC). The RBC GAM 2024 Annual Stewardship Report is in the submission stage with the FRC.[1]

United Nations Principles for Responsible Investment (UN PRI)
Signatory since: 2015
RBC GAM is a signatory to the UN Principles for Responsible Investment (PRI)[2]. The PRI is a global network for investors committed to incorporating ESG considerations into their investment practices and ownership policies. We put the PRI’s six Principles of Responsible Investment into practice and believe that they are aligned with our existing approach to responsible investment. A member of RBC GAM’s RI team sits on the Policy Committee. We are also a signatory to the PRI Statement on ESG in Credit Ratings, which encourages credit rating agencies to proactively take ESG factors into consideration for relevant issuers.

US SIF - The Forum for Sustainable and Responsible Investment
Signatory since: 2013
RBC GAM is an institutional member of US SIF: The Sustainable Investment Forum (US SIF). US SIF states (source) it is the leading voice advancing sustainable, responsible and impact investing across all asset classes in the US.

Notes:
[1] In 2023, RBC GAM consolidated the activities of two regulated legal entities in the United Kingdom (UK), RBC GAM-UK and BlueBay Asset Management LLP (BlueBay), into RBC GAM-UK. BlueBay’s stewardship activities have been incorporated throughout RBC GAM’s Annual Stewardship Reports since the 2022 version.
[2] In 2023, RBC GAM consolidated the activities of two regulated legal entities in the United Kingdom (UK), RBC GAM-UK and BlueBay Asset Management LLP (BlueBay), into RBC GAM-UK. Signatory status falls under the RBC Global Asset Management’s (RBC GAM) group membership as of April 2023 onwards and is not related to funds. Up until this period, both RBC GAM and its affiliate, BlueBay Asset Management LLP (BlueBay) were signatories (signatory year being 2015 for RBC GAM, and 2013 for BlueBay). Both entities separately filed annual transparency reports (where RBC GAM’s one included affiliates RBC Global Asset Management (UK) and BlueBay). With the merger of RBC Global Asset Management (UK) and BlueBay in April 2023, BlueBay’s separate PRI signatory status has lapsed (including its annual reporting obligations).

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