United Kingdom, Institutional
Change
This is a marketing communication. Please refer to the prospectus of the Fund and to the KIID / KID and/or offering documents before making any final investment decisions. Please refer to the risks section at the bottom of this page.
In addition, we believe FORVIA screens attractively from an ESG perspective1, particularly from a climate standpoint where the company has concrete targets in place including a goal of net zero by 2045. Furthermore, the company is well positioned to take advantage of trends towards electric vehicles with market share in clean mobility technologies. Finally, thus far, we feel the management team has executed its strategy well in terms of capital allocation and transparency to investors. The combination of these factors reinforces our strong conviction in FORVIA.
competitive advantage
Our research on FORVIA has led us to believe that the issuer has a sustainable competitive advantage in the automotive supplier industry, as high customer switching costs act as barriers to competition. FORVIA has deeply integrated relationships with original equipment manufacturers (OEMs) and there are high switching costs (financial, technical and regulatory hurdles) associated with switching suppliers, particularly in the middle of an auto production cycle, which can last upwards of 10 years. FORVIA has built a strong reputation as an established and reliable partner to OEMs, meaning there is a high bar to switch to lesser-known suppliers for mission-critical automotive components and equipment.
Key points
- A globally diversified automotive supplier, specialising in seating, electronics and clean mobility equipment.
- Long-term and deeply integrated relationships with OEMs provide barriers to entry for competitors.
- We maintain conviction in management’s ability to execute and deliver continued deleveraging over the medium term.
CONSIDER THE RISKS
Investors should consider the risks that may impact their capital, before investing. The value of your investment may fluctuate from the time of the original investment. Please refer to the risks section enclosed. A decision to invest should take account of all the characteristics and objectives described in the prospectus and KID and/or offering documents.
1 The portfolio does not have a sustainable investment objective. While the evaluation of Sustainability Risks through the analysis of ESG factors is part of the investment process, it may not necessarily result in the exclusion of a security. Please refer to the sustainability related disclosures for information on the commitments of the portfolio: https://www.wellington.com/en/legal/sfdr.
Risks
Below Investment Grade: Lower rated or unrated securities may have a significantly greater risk of default than investment grade securities, can be more volatile, less liquid, and involve higher transaction costs. | Capital: Investment markets are subject to economic, regulatory, market sentiment and political risks. All investors should consider the risks that may impact their capital, before investing. The value of your investment may become worth more or less than at the time of the original investment. The Fund may experience a high volatility from time to time. | Credit: The value of a bond may decline, or the issuer/guarantor may fail to meet payment obligations. Typically lower-rated bonds carry a greater degree of credit risk than higher-rated bonds. | Emerging Markets: Emerging markets may be subject to custodial and political risks, and volatility. Investment in foreign currency entails exchange risks. | Hedging: Any hedging strategy using derivatives may not achieve a perfect hedge. | Interest Rates: The value of bonds tends to decline as interest rates rise. The change in value is greater for longer term than shorter term bonds. | Manager: Investment performance depends on the investment management team and their investment strategies. If the strategies do not perform as expected, if opportunities to implement them do not arise, or if the team does not implement its investment strategies successfully; then a fund may underperform or experience losses. | Sustainability: An environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.
Please refer to the fund prospectus and KIID/KID for a full list of risk factors and pre-investment disclosures.