Top-performing fund avoids investments in emerging markets low on ESG score

A top-performing emerging-market bond fund is avoiding investments in Russia, China, and Saudi Arabia as the three countries score too low in its ratings for environmental, social, and governance risks.

The $1.5-billion Candriam SRI Bond Emerging Markets Fund has outperformed almost 90 per cent of peers in the past three years and screens for ESG factors. The bottom 25 per cent of countries on the fund’s ranking get blacklisted, no matter how big a role they play in the bond world.

This approach could be a harbinger of the challenges facing developing nations  that rely on foreign capital. At the moment sovereign