Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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Janus Henderson UK Responsible Income Fund |
Ethical | OEIC/Unit Trust | UK | Equity Income | 15/05/1995 | |
Fund Size: £509.99m Total screened & themed / SRI assets: £3466.12 Total Responsible Ownership assets: £33576.14 Total assets under management: £251116.46 As at: 31/03/23 |
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OverviewThe investment manager adopts a flexible and pragmatic investment process, designed with the intention of achieving its objective in a variety of market conditions. The investment process focuses on UK companies with good cash flow and growing dividends, as well as seeking only to invest in companies with a high level of ESG integrity, which avoids investing in companies involved in such areas as gambling, alcohol production, the military, nuclear energy, and tobacco. |
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FiltersFund informationSustainabilityLimits exposure to carbon intensive industries UN Global Compact linked exclusion policy Transition focus Nature & BiodiversityAvoids genetically modified seeds/crop production Genetic engineering exclusion Climate Change & EnergyNuclear exclusion policy Coal, oil & / or gas majors excluded Climate change / greenhouse gas emissions policy Invests in clean energy / renewables Fracking and tar sands excluded Arctic drilling exclusion Fossil fuel reserves exclusion Paris aligned fund strategy Encourage transition to low carbon through stewardship activity Fossil fuel exploration exclusion - direct involvement Fossil fuel exploration exclusion – indirect involvement Human RightsHuman rights policy Child labour exclusion Social / EmploymentLabour standards policy Responsible mining policy Mining exclusion Ethical Values Led ExclusionsAnimal testing exclusion policy Tobacco and related product manufacturers excluded Armaments manufacturers avoided Alcohol production excluded Gambling avoidance policy Pornography avoidance policy Animal testing - excluded except if for medical purposes Civilian firearms production exclusion Governance & ManagementGovernance policy Anti-bribery and corruption policy Avoids companies with poor governance UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy Asset Size & MetricsInvests in small, mid and large cap companies Invests mostly in large cap companies How The Fund WorksBalances company 'pros and cons' / best in sector Strictly screened ethical fund Negative selection bias Norms focus Combines norms based exclusions with other SRI criteria Combines ESG strategy with other SRI criteria Focus on ESG risk mitigation Significant harm exclusion SRI / ESG / Ethical policies explained on website Intended Clients & Product OptionsIntended for investors interested in sustainability Available via an ISA (OEIC only) Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership / stewardship policy or strategy (AFM company wide) Responsible ownership policy for non SRI funds (AFM company wide) Responsible ownership / ESG a key differentiator (AFM company wide) Vote all* shares at AGMs / EGMs (AFM company wide) Integrates ESG factors into all / most fund research In-house diversity improvement programme (AFM company wide) Invests in newly listed companies (AFM company wide) Offer structured intermediary training on sustainable investment Offer unstructured intermediary sustainable investment training ResourcesIn-house responsible ownership / voting expertise Employ specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies Collaborations & AffiliationsPRI signatory UKSIF member Climate Action 100+ or IIGCC member Fund EcoMarket partner TNFD forum member (AFM company wide) Investment Association (IA) member AccreditationsUK Stewardship Code signatory (AFM company wide) Engagement ApproachRegularly lead collaborative ESG initiatives (AFM company wide) Encourage responsible corporate taxation (AFM company wide) Engaging on climate change issues Engaging with fossil fuel companies on climate change Engaging to reduce plastics pollution / waste Engaging to encourage responsible mining practices Engaging on biodiversity / nature issues Engaging on human rights issues Engaging on labour / employment issues Engaging on diversity, equality and / or inclusion issues Engaging on governance issues Engaging on responsible supply chain issues Company Wide ExclusionsReview(ing)carbon / fossil fuel exposure for all funds (AFM company wide) Controversial weapons avoidance policy (AFM company wide) Climate & Net Zero TransitionEncourage carbon / greenhouse gas reduction (AFM company wide) Carbon offsetting - offset carbon as part of our net zero plan (AFM company wide) In-house carbon / GHG reduction policy (AFM company wide) Committed to SBTi / Science Based Targets Initiative TransparencyPublish responsible ownership / stewardship report (AFM company wide) Full SRI policy information on company website Full SRI policy information available on request |
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PolicyAnalysing ESG issues is an important part of the analysis of a company’s business fundamentals. Environmental factors consider a company’s impact on the environment, social factors consider the way businesses treat and value people, and governance factors focus on corporate policies and how companies are governed. We believe companies with sound governance practices and strong stakeholder relations, and that manage relevant environmental and social risks responsibly, have a greater propensity to create long-term value for shareholders. The Fund aims to achieve above median long-term performance versus unrestricted UK equity peers, while adhering to its ESG criteria and also generating a good level of income. The Fund is best thought of as a low carbon, equity income portfolio with strong governance and sustainability standards. Portfolio Manager Andrew Jones is the lead manager of the strategy and Portfolio Manager David Smith, CFA, assists Andrew. They are both supported by the wider Janus Henderson Global Equity Income Team (the ‘team’), and the firm’s ESG Investment Team. The ESG Investment Team is an in-house specialised group focused on ESG data analysis and research, governance, ESG company and thematic engagement, proxy voting and advisory services that serves as a resource for all our investment desks. The team’s mission is to promote ESG integration across the business. They play a leading role internally in working with investment desks to enhance their ESG integration processes and externally leading our active participation in numerous ESG initiatives. As mentioned earlier, the Fund is actively managed with reference to the FTSE All Share Index, which is broadly representative of the companies in which it may invest, as this can provide a useful comparator for assessing the Fund's performance. The investment manager has discretion to choose investments for the Fund with weightings different to the index or not in the index. As an additional means of assessing the performance of the Fund, the IA UK Equity Income sector average, which is based on a peer group of broadly similar funds, may also provide a useful comparator.
Key differentiators
The Fund seeks a responsible approach to investing in UK companies by incorporating ESG factors in investment decisions and avoiding companies that the investment manager considers to be involved in business activities and behaviours that may be environmentally and/or socially harmful. Over the long-term, the investment team believes there are two key factors that drive stock prices:
Responsible investment In 2006, Janus Henderson became a founding signatory of the United Nations Principles for Responsible Investment (UN PRI), publicly demonstrating its commitment to including environmental, social and governance factors in investment decision making. The UN PRI defines responsible investment as ‘a strategy and practice to incorporate ESG factors in investment decisions and active ownership.’ This definition is reflected in the Fund’s responsible investing approach with an ethos of strong avoidance criteria and a focus on integrating environmental, social and governance factors. The portfolio manager’s investment approach is not static; as the science and knowledge of environmental, social and governance issues evolves, the manager will look to adapt and refine the approach.
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ProcessInvestment screens The first stage is screening in order to ensure that the securities are eligible for purchase. The Fund has clear avoidance criteria that it must adhere to. If a company earns more than 10% of its revenue from one of the areas in the table below it is not eligible for inclusion in the portfolio.
Investible universe To minimise exposure to business activities and behaviours that may be environmentally and/or socially harmful, the strategy seeks to avoid businesses that have products or operations directly associated with the certain criteria, subject to de minimis limits. De minimis limits: Where possible we will seek to achieve zero exposure in respect of the negative criteria. However, there may be instances when we will apply a de minimis limit. A de minimis limit is a threshold above which investment will not be made and relates to the scope of a company’s business activity; the limit may be quantitative (eg, expressed as a percentage of a company’s revenues), or it may involve a more qualitative assessment. De minimis limits exist because sometimes avoiding an industry entirely may not be feasible given the complex nature of business operations. In such instances we will invest in a company only if we are satisfied that the ‘avoided’ activity forms a small part of the company’s business, and when our research shows that the company manages the activity in line with best practice. We seek to avoid businesses that have products or operations directly associated with the following criteria:
Portfolio construction is driven by stock selection. The portfolio will comprise 60-75 equity investments. Every investment is selected on its own fundamental stock attributes but must contribute to overall portfolio fit and risk diversification. As a result of the Fund’s ESG avoidance criteria, a number of large sectors are excluded in their entirety, including energy, mining, and a number of consumer staples. Wherever possible the manager will seek to construct the portfolio with similar factor exposure, while having superior ESG profiles. For example, owning industrials will provide cyclical exposure which should perform well when mining is performing well, and owning utilities should provide downside support relative to a falling market in a similar way to alcohol/tobacco stocks. The one area that cannot be replicated in this way is the energy sector.
ESG integration We believe companies with sound governance practices and strong stakeholder relations that manage relevant environmental and social risks responsibly have a greater propensity to create long-term value for shareholders. Key ESG issues considered as part of the investment process include corporate governance, human capital and diversity, climate change, controversies, disclosure, transparency, and business ethics. Sustainalytics, an external ESG rating provider, is used to provide ESG rankings at both the portfolio and individual company level. These ratings are supplemented with Janus Henderson research and analysis as well as engagements with companies when appropriate. It is expected that the strategy’s ESG risk, as measured by Sustainalytics will be superior to its benchmark, the FTSE All-Share index. To make informed investment decisions, a wide range of specialist tools and information are made available to the portfolio manager and broader investment teams. The firm subscribes and uses a number of specialist ESG research and data providers including: Sustainalytics, Vigeo EIRIS, MSCI, ISS, Bloomberg, RepRisk, and Institutional Voting Information Services (IVIS). These providers are selected and monitored by the central Janus Henderson ESG Investments Team.
Company engagement and voting Company engagement forms an important part of the investment process. Meetings incorporate a wide range of topics including environmental, social and governance issues where relevant. We take an active approach to communicating our views to companies and seeking improvements in performance where necessary, including appropriate standards of corporate responsibility. Our analysis of the portfolio against key ESG performance indicators helps us identify topics for engagement, together with the controversies, scientific advances and actions taken by companies. These topics for engagement are not fixed and are subject to change depending on the activities of the company and their materiality. Janus Henderson’s Proxy Voting Policy and Procedures document, which can be found on www.janushenderson.com, sets out the firm’s proxy voting policy. Ultimate voting authority rests with the portfolio manager, who is responsible for ensuring that votes are exercised in the best interests of clients, with ESG factors an important consideration where relevant. The portfolio manager is supported by the in-house Governance and Stewardship Team, who work closely with investment teams to help analyse voting-related issues. With regard to voting and company engagement, the portfolio manager considers certain core principles such as disclosure, transparency, board composition, shareholder rights, audit and internal controls, and remuneration. A key element of the approach to proxy voting is to support these principles and practices and foster the long-term interests of shareholders. Given that the Fund’s responsible investment process incorporates ESG factors in investment decisions, there will be relatively few shareholder proposals on ESG issues for the companies held in the Fund. We aim to support shareholder proposals on ESG factors for portfolio holdings following our approach to voting and engagement outlined within this document. The Fund’s Quarterly Voting and Engagement Report can be found on www.janushenderson.com.
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Resources, Affiliations & Corporate StrategiesThe following investment individuals are dedicated to ESG at Janus Henderson:
We have a specialist ESG Investment Team with three pillars – Governance & Stewardship, ESG Investment Research and ESG Strategy & Development. The team is headed up by Chief Responsibility Officer Michelle Dunstan and its mission is to promote ESG integration across Janus Henderson and serve as a resource for all investment teams. The three pillars are structured to support our investment teams with ESG integration, stewardship and ESG intelligence for portfolio construction, product development, thought leadership, and data and technology. The Governance & Stewardship Team evolves the firm’s engagement and voting policy and process, and lead on collaborative and thematic engagements. The ESG Investment Research Team supports the investment desks with ESG research and insights. The ESG Strategy and Development Team focuses on ESG data, product design and thought leadership generation. In 2022, we completed the second phase of our hiring. The ESG Strategy & Development team was expanded with the addition of new members in Denver and Edinburgh who are working with the investment teams on ESG integration, with a focus on ESG data and tools and product development
ESG Investment Team We have a specialist ESG Investment Team with three pillars – Governance & Stewardship, ESG Investment Research and ESG Strategy & Development. The team is headed up by our Chief Responsibility Officer and its mission is to promote ESG integration across Janus Henderson and serve as a resource for all investment teams. The three pillars are structured to support our The Governance & Stewardship Team evolves the firm’s engagement and voting policy and process, and lead on collaborative and thematic engagements. The ESG Investment Research Team supports the investment desks with ESG research and insights. The ESG Strategy and Development Team focuses on ESG data, product design and thought leadership generation.
ESG Product Strategy Our ESG Product Strategy Team provides a centralised function to support all business functions with respect to ESG. This team partners with the investment teams on content creation, client enquiries, and aligning our ESG product development and investment capabilities. Additionally, our Head of Client Experience has been partnering with the ESG teams to develop detailed ESG reporting that satisfies the needs of our clients.
ESG governance We believe that strong governance is foundational to good business and all aspects of ESG. To reflect our commitment to Corporate Responsibility and Responsible Investing, we appointed a Chief Responsibility Officer to oversee all elements of our responsible investment strategy. To emphasise the importance of our responsibility efforts and to ensure they are embedded across our entire firm, the Chief Responsibility Officer will report directly to the CEO and be a member of the Strategic Leadership Team. Michelle Dunstan, an experienced leader in ESG strategy and investing assumed this position in January 2023 and will guide and shape our ESG efforts and governance structure in 2023 and beyond. In support of our strategic goals, we have created individual initiatives to ensure that ESG is appropriately reflected in our client experience, that our Funds and mandates respect emerging regulation pertaining to ESG, and that the ESG operating model within Investments continues to evolve. Additionally, we have integrated the management of ESG risks into management committees and established a dedicated ESG Oversight Committee responsible for ensuring that the Investments framework to manage ESG-related risks is adequate and effective.
ESG research, data and ratings We subscribe to a broad range of external ESG information providers and make this information available directly to the investment teams. Janus Henderson subscribes to a wide range of specialist ESG research providers and makes this information available directly to the investment teams. However, we do not base our investment decisions solely on third-party ESG data. Rather, we augment our proprietary ESG analysis and ESG ratings with data from third parties. We use a wide range of specialist ESG research, data and tools from providers, including:
As our strategic ESG data provider, MSCI provides various climate-related metrics and tools to enable us to assess climate-related risks and opportunities across portfolios, including various carbon metrics, climate scenario analysis, physical and transition risks assessments, and Implied Temperature Rise. We report on these climate metrics in our quarterly ESG reports. In addition to being a founding signatory of the UNPRI, as part of our commitment to responsible investment, Janus Henderson is involved in a wide range of ESG related initiatives and working groups as a member, supporter or in an advisory capacity. Our participation in industry working groups along with our sharing of insights and knowledge of ESG through our published materials reflects our firm as active proponents of sustainable investing. For the full list of our ESG Affiliations, Memberships and Certification details please refer to the Affiliations section in our website.
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DialshifterThis fund is helping shift the dial from brown to green by... The fund seeks a responsible approach to investing in UK companies by incorporating environmental, social and governance (ESG) factors in investment decisions and avoiding companies that the investment manager considers to be involved in business activities and behaviours that may be environmentally and/or socially harmful.
Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…
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Literature
Disclaimer This document is intended solely for the use of professionals, defined as Eligible Counterparties or Professional Clients, and is not for general public distribution. Marketing Communication. Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. If you invest through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Any investment application will be made solely on the basis of the information contained in the Prospectus (including all relevant covering documents), which will contain investment restrictions. This document is intended as a summary only and potential investors must read the prospectus, and where relevant, the key investor information document before investing. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes. Issued by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Henderson Investors International Limited (reg no. 3594615), Janus Henderson Investors UK Limited (reg. no. 906355), Janus Henderson Fund Management UK Limited (reg. no. 2678531), Henderson Equity Partners Limited (reg. no.2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Janus Henderson Investors Europe S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier). Janus Henderson, Knowledge Shared and Knowledge Labs are trademarks of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc.
Last amended: 16/06/23 03:25 |
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05/03/2024