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Application Form for Subscription or Redemption of Shares
Forms

    SFDR Disclosures

    1. Integration of Sustainability Risks

    Sustainability Risks are integrated into the investment decision-making process and risk monitoring of the Fund to the extent that they represent potential or actual material risks and/or opportunities to maximising the long-term risk-adjusted returns of the Fund.

    Such risks are principally linked to climate-related events resulting from climate change (so-called “physical risks”) or to society’s response to climate change (so-called “transition risks”), which may result in unanticipated losses that could affect the Funds’ investments and financial condition. Societal events (such as inequality, lack of inclusiveness, poor or deteriorating labour relations, insufficient investment in human capital, lack of accident prevention measures, changing customer behaviour, etc.) or governance shortcomings (such as democratic instability, poor sovereign or political party leadership or reputation, recurrent significant breaches of international agreements, bribery issues, insufficient products quality and safety, sales of negative goods, etc.) may also translate into Sustainability Risks.

    The Investment Manager’s portfolio managers assess information relevant to Sustainability Risks and take such information into account when forming an investment thesis and making an investment decision. The Investment Manager employs a number of key inputs to assess the impact and relevance of Sustainability Risks with respect to the Funds’ investments, which are incorporated into the Investment Manager’s determination of an “ESG-score” for the sovereigns, sectors and issuers in which the Fund may invest.

    The Investment Manager adopts a range of integration approaches many of which aim to evolve over time and in response to further regulatory requirements and market developments, including the following:

    • use of external data sources to assess material impacts of sustainability factors, where data is available (primarily Bloomberg ESG Data Service, and in the unlikely event that no data is available, the Investment Manager’s ESG team will make a best efforts estimate);
    • development of proprietary overlays and scoring methodologies;
    • investment in tools to equip our portfolio managers with access to ESG information for risk management, research and portfolio construction; and
    • use of guideline control processes to assist with the monitoring of investment decisions and portfolio composition with respect to ESG considerations, where both possible and applicable.

    While Sustainability Risk would not by itself prevent the Investment Manager from making any investment, Sustainability Risk forms part of the Investment Manager’s overall assessment of a potential investment’s relative value. By taking Sustainability Risks into consideration during its investment decision making process, the intention of the Investment Manager is to manage such Sustainability Risks in a way that Sustainability Risks do not have a material negative impact on the value or performance of the Fund over other risks in relation to the investments. While the expectation is that the potential impact of Sustainability Risks on the returns of the Fund is limited there can be no guarantee that losses will not arise.

    1. Consideration of principal adverse impacts

    For the purposes of Article 7 of the SFDR, the Investment Manager does not currently consider the adverse impacts of investment decisions being made in respect of the Fund on sustainability factors due to the size and scale of the Fund’s activities at this time. The Fund is not currently aligned specifically with indicators for principal adverse impacts on sustainability factors, although its underlying investments may reflect these considerations to an extent via the Investment Manager’s proprietary ESG assessment methodology. The Investment Manager will keep this determination under review.

    Additionally, at the present time the Investment Manager does not, when making investment decisions, consider the adverse impacts of decisions on sustainability factors and does not, in its investment advice, consider adverse impacts of investment decisions on sustainability within the meaning of Article 4(1)(a) of the SFDR as it considers the lack of relevant data, regulatory uncertainty and lack of clear methodology do not enable it to do so. The Investment Manager will keep its position in this respect under review as reporting practices develop and may adopt the Article 4 framework in the future if it considers that to be practical and appropriate to do so, including being able to meet the requirements of the Regulatory Technical Standards.

    1. Remuneration policy in relation to the integration of sustainability risk

    The Investment Manager has adopted a remuneration policy on remuneration practices in relation to its staff whose professional activities have a material impact on the risk profile of the Funds, which seeks to promote sound and effective risk management and discourage excessive risk-taking. This also applies with respect to sustainability risks.

    1. Description of the promotion of environmental and social characteristics

    The characteristics promoted by the Fund consist of investing in instruments with acceptable environmental, social and governance ratings determined in accordance with the Investment Manager’s ESG assessment methodology. Investments within the Fund’s investment universe are selected by the Investment Manager in accordance with the following process with respect to ESG characteristics:

    1. The investment or potential investment is subjected to ESG analysis per the Investment Manager’s proprietary ESG assessment methodology;
    2. Companies are screened in accordance with the Investment Manager’s exclusion policy;
    3. Portfolio holdings are monitored on a regular basis; and
    4. ESG issues that have been identified during the research and monitoring process are considered quarterly at the Investment Manager’s ESG committee reviews.

    For each potential and existing investment within this financial product’s investment universe, the Investment Manager assesses and assigns a weighted “ESG Score” at country, industry and issuer level (as applicable) by evaluating both objective and subjective data using a combination of third party ESG ratings (primarily Bloomberg ESG Data Service), public information and the Investment Manager’s proprietary research. To assign ESG Scores to investments within this financial product’s investment universe, the Investment Manager analyses factors such as (without limitation): (i) a country’s rule of law, democratic stability, reputation, and levels of corruption and similar factors, and (ii) an industry’s and/or issuer’s emissions, innovation, energy/resource output and consumption, human rights record, product safety and responsibility, labour relations and workplace standards, community/social welfare, standards of leadership and ethics, shareholder engagement and activism, and implementation of sustainable business practices and any sector’s or issuer’s stated objectives and achievement thereof, in its determination of the relevant ESG Score.

    Investments are also subjected to the Investment Manager’s exclusion screening process to prevent long positions in issuers (i) involved in coal, gambling or controversial weapons industries (including group companies deriving 15% or more of their revenues from these industries); (ii) who are categorically involved in other non-ESG compliant activities such as child labour, environmental damage, predatory lending or pornography; (iii) who are in unremedied breach of normative standards, namely the United Nations Global Compact Principles and the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises, or (iv) who otherwise have unacceptably weak ESG Scores in accordance with data points determined by the Investment Manager.

    1. Review of disclosures

    The Investment Manager, in consultation with the Manger, will update relevant disclosures for SFDR Level II before 1 January 2023 and at least on an annual basis thereafter.

    Date of review: 30 November 2022