To provide medium term capital appreciation with a diversified and actively managed portfolio of various classes of assets offering a broad distribution of risks, without any specific restriction on tracking error. The sub-fund will use a selction of securities complying with Environmental, Social and Governance (ESG) responsibility criteria. The portfolio will be composed of issuers that are leading in ESG best-practice or attractive due to their progression in ESG best-practice. For a limited portion, the sub-fund might invest in companies or securities (as green, social, sustainability or SDGs bonds) that could bring a net positive sustainability impact.
The sub-fund promotes environmental and social characteristics and qualifies as an investment product in accordance with article 8(1) of Regulation (EU) 2019/2088 on sustainability related disclosures in the financial services sector. To Select eligible secutrities, the manager combines financial and non-financial analysis.
The sub-fund may invest in bonds, equities, money market instruments through direct investments, financial derivative instruments, as well as undertakings for collective investments (including exchange traded funds) and, on an ancillary basis, in cash instruments. The emphasis is placed on the diversification of investments on an international scale (including emerging markets). The investment universe of the sub-fund may be reduced to comply with the sustainability criteria.It seeks to generate returns at a moderately low risk level by actively managing a portfolio of transferable securities.
The Management Company uses the ESG risk ratings provided by Sustainalytics and the exclusions are filtered using the product involvment screening tool provided by Sustainalytics.
The ESG risk scores should cover at least 70% of investments (cash and derivatives instruments are not covered by the ESG analysis).
The regular assessments are carried out by the management company in accordance with its Sustainable Investment Policy. It may occurs that the sub-fund invest indirectly in companies or in activities that are prohibited, via external funds but the Management company strived to reduce this sustainability risk.
Undirect investment in external funds : The Investment Manager will only select external funds which hold an European sustainability label (as the Label ISR, the LuxFlag ESG Label …) so deemed to be at least considered as Art.8 funds. It can occur that external funds may not apply the same set of exclusions and the sustainability investment strategy may deviate from the Sustainability Investment Policy of the Management company (that is applying to direct investments).
Direct investment in securities: selection of investments will rely on a combination of financial criteria, as well as Environmental, Social & Governance criteria and other sustainability criteria and of financial criteria. The sustainable selection approach combines a sustainability negative screening (exclusions) and a positive ESG selection (ESG Best-in-class/ ESG improvers) investment process.
In compliance with the UN PRI principles, the sub-fund excludes direct investments in securities issued by companies involved in highly controversial activities (such as weapons, tobacco production, adult entertainment, GMOs, Thermal coal…) and companies under a non-compliant status regarding the UN Global Compact 10 principles. The sub-funds excludes from direct investments securities issued by Nations deemed as under an oppressive regime, and that have not ratified some international treaties (as the NPT on Nuclear weapons, the Paris Agreement on Environment, the ILO
convention182 on child labor). The sub-fund should complies with the exclusions rules applying to article 8 and article 9 investment products of the Sustainability Investment Policy of the Management Company.The sub-fund will invest in securities issued by companies and governements which have been screened as ESG risk compliant with the investment rules applying to article 8 and article 9 investment products of the Sustainable Investment Policy of the Management company (mainly an ESG Best-in-class 50% selection process when considering corporates and ESG best-in-universe
when considering Governments and in a less extend : ESG improvers).
The sub-fund seeks to generate returns at a moderately low risk level by actively managing a portfolio of transferable securities.
The manager will seek to maintain a moderate risk profile. He will favor interest-bearing securities of various maturities and equities while giving preference to the former. Investments on Emerging Markets are limited to 20%. The manager will allocate the net assets according to the following strategic allocation:
- Equities 20%
- Bonds 70%
- Short-term debt securities 10%
The manager may deviate from the above allocation on a tactical basis, following its market anticipations.
The sub-fund may invest up to 10% of its net assets into Chinese equities (A-shares), denominated in CNH and that are listed on the Hong Kong Stock Exchange, via the Shanghai-Hong Kong and Shenzhen Stock Connect.The sub-fund may seek to minimize the exposure to currency fluctuations by hedging currency risk through financial derivative instruments as described in Appendix 2 of the full prospectus.
The instruments described below are notre covered by the ESG analysis.
The use of financial derivative instruments is restricted to:
- -listed instruments in accordance with the investment policy (including but not limited to futures);
- -OTC instruments for currency hedging purposes (including, but not limited to forward and foreign currency exchange contracts).
The use of OTC instruments for purpose other than currency hedging is prohibited (including, but not limited to OTC derivatives, CDS & CDO contracts).
The sub-fund may not invest in defaulted assets but may invest in Distressed Assets up to 10% of the sub-fund's net assets.
This sub-fund is actively managed and is compared to the risk benchmark as described in Appendix 2 for performance and risk level indicator purposes. However, the reference to this index does not constitute any objective or limitation in the management and composition of the portfolio and the sub-fund does not restrain its universe to the index components. The index does not evaluate or include its constituents on the basis of environmental and/or social characteristics and is therefore not aligned with the ESG characteristics promoted by the sub-fund.
Therefore, returns may deviate materially from the performance of the reference index.
