Total assets under management: £86872.77

As at: 31/03/24

Contact: Ryan Grey, Sales - Intermediary (UK) ryan.grey@bnymellon.com

Overview

Filters

Fund information

Policy

Screens and Exclusions

The mainstay of our Sustainable product range is to generate sustainable risk-adjusted returns for clients alongside improved long-term global outcomes for society and the environment. The process is derived from a combination of ‘exclusions’ of what we would always seek to avoid and ‘inclusions’ of what we consider to be part of our Sustainable investment spectrum (solution providers, balance stakeholders, and transition businesses). For complete clarity these exclusions apply only to equities and corporate bonds: Cash and liquid near cash assets, money market funds, derivatives and structured notes (e.g. alternative risk premia strategies) are not required to meet the sustainability criteria.

In our Sustainable portfolios, we seek to identify and select businesses that demonstrate the following attributes (and are classified accordingly):

Solution providers: These are companies that provide solutions (products and services) to environmental or social challenges or are in high-positive-externality industries.

Balance stakeholders: These are companies that can be evidenced as successfully managing the competing interests of key stakeholder groups. Fundamentally, this is primarily about the internal management of a company, rather than being about the impacts of its products and services, which are captured under the solution-providers classification. We are looking for leaders or best-in-class industry practices.

Transitions: These are companies that have the potential, or are already demonstrating a credible commitment, to a plan to transition their business models by reducing and mitigating their most material (to shareholders and other stakeholders) negative ESG externalities.

These classifications are guided by clear frameworks, developed and maintained by the Newton RI team, ensuring robustness and consistency in order to identify the strongest sustainable investment propositions. The overall framework is reviewed regularly and may evolve/shift over time.

The exclusions mainly seek to avoid investments in areas of significant social or environmental harm and are known as the ‘red lines’, which are hard exclusions and cannot be overridden for our sustainable strategies. Here we seek to avoid investments involved in areas of high negative externalities, those that cause significant long-term societal harm, investments that have been identified as having severe controversies and/or violating one or more of the ten UN Global Compact Principles covering areas including human rights, labour practices, corruption and the environment. We do not believe that exposure to such activities is aligned with the objectives of our sustainable range of products.

Red lines/hard exclusions

The red lines are hard coded into NIM’s order management system (Aladdin). Any potential violations are caught in the pre-trade compliance checks and noted as compliance-level violations. Compliance-level violations can only be overridden by the guideline compliance team before the order can be released to the dealers for trading. Any breaches are also logged with the operational risk team and are subject to root cause analysis and control effectiveness reviews.

Red lines**

UN Global Compact Fails*
The company is implicated in one or more controversies whereby it has been deemed to have violated one or more of the principles of the UN Global Compact (UNGC). The UNGC principles relate to human rights, labour, the environment, and anti-corruption.
Fail*

Tobacco Production
The company manufactures tobacco products.
> 0% revenue

Tobacco Retail and Supporting Products
Revenue from products that support the tobacco industry and /or retail or wholesale
> 10% revenue

Controversial Weapons Manufacture
Manufacturers of the following weapons: anti-personnel mines, cluster munitions, chemical weapons, biological weapons, nuclear weapons, Incendiary weapon, non-detectable fragment, blinding laser weapons, white phosphorus weapons, depleted uranium weapons.
> 0% revenue (clear evidence)

Alcohol Production
The company manufactures alcoholic beverages.
>= 10% revenue

Gambling Operations
The company owns and/or operates a gambling venue.
>= 10% revenue

Adult Entertainment
The company produces adult content or owns/operates adult entertainment venues.
>= 10% revenue

Thermal Coal Extraction
The company derives revenue from the extraction of thermal coal.
>= 10% revenue

*Which is a simple pass/ fail/ watch list test whereby Newton will screen out those companies that ‘fail’.
**We use a combination of external ESG service providers (currently MSCI, Sustainalytics and Moody's Analytics to inform our decisions.

Our process seeks to clearly distinguish between activities that are subject to hard exclusions (red lines) versus those activities that sustainability portfolio managers may be able to invest in in certain circumstances (precautionary pool).

Precautionary pool

For areas that have been identified as having controversies or the potential to cause harm (such as fossil fuels other than thermal coal, animal welfare, conventional defence and nuclear power) but are not covered by the red lines, sustainable portfolio managers are alerted, when considering such investments, to review the controversial activity through what is referred to as the “precautionary pool”. The precautionary pool includes companies that have been flagged in relation to their involvement in heavy-emitting industries, hold exposures to activities that are red lined, but at lower revenue thresholds, and areas such as nuclear power and animal welfare, where there may be nuances in the investment case that are deemed important to be highlighted.

The following types of businesses may be captured within the precautionary pool:

• Those that have exposure to the above activities but applying a lower revenue threshold for awareness – for example, tobacco retail and supporting products where revenues exceed 0%, which means any tobacco retailer or supporting products company with revenues >0% and <10% will be highlighted under the precautionary pool.
• Businesses that have related exposures that we feel are important for visibility – such as those that provide supporting services to some of these areas - For example, alcohol retail at 10% or more revenue contribution.
• Those that are in heavy-emitting industries that fail a profitability test with a carbon tax and are deemed to have an insufficient climate strategy – supporting our view that investing behind the transition and supporting a shift from ‘brown’ to ‘green’ in a careful way is a key part of the global decarbonisation challenge.
• Other areas where there may be nuances in the investment case that are deemed important to be highlighted – for example, animal welfare or nuclear power.

The full list of activities caught currently under the precautionary pool is included below:

Tobacco retail and supporting products

Revenue from products that support the tobacco industry and /or retail or wholesale tobacco products manufactured by other companies.
> 0% Revenue

UNGC watchlist

The company is implicated in one or more controversies which have been deemed to be serious enough to warrant ongoing monitoring relative to UNGC principles.
Flagged

Controversial weapons manufacture

Company manufactures key weapon parts or the delivery system for the following weapons: Anti-Personnel Mines, Cluster Munitions, Chemical Weapons, Biological Weapons, Nuclear Weapons, Incendiary Weapon, Non-Detectable Fragment, Blinding Laser Weapons, White Phosphorus Weapons, Depleted Uranium Weapons.
Evidence of involvement

Companies that have historically been flagged as manufacturers of the following weapons or of delivery systems or key parts for the weapons: anti-personnel mines, cluster munitions, chemical weapons, biological weapons, nuclear weapons, incendiary weapon, non-detectable fragment, blinding laser weapons, white phosphorous weapons, depleted uranium weapons.
Evidence of involvement

Alcohol production

The company manufactures alcoholic beverages.
>= 5% Revenue

Gambling operations
The company owns and/or operates a gambling venue.
>= 5% Revenue

Adult entertainment

The company produces adult content or owns/operates adult entertainment venues.
>= 5% Revenue

Alcohol retail

The company distributes and/or engages in the retail sale of alcoholic beverages.
>= 10% Revenue

Gambling

The company provides supporting products or services to gambling operators.
>= 10% Revenue

Adult entertainment distribution

The company distributes adult entertainment materials.
>= 10% Revenue

Climate qualification test

Companies in heavy emitting industries that fail the profitability test with a carbon tax and are deemed to have an insufficient climate strategy.
Fail

Animal welfare

Revenue from products tested on animals, provision of animal testing services, production/sale of fur and intensive animal farming.
>= 10% Revenue or Flagged (for animal testing services)

Nuclear power

Revenue from the production of nuclear power.
>= 10% Revenue

Thermal coal extraction

The company derives revenue from extraction of thermal coal.
>0% Revenue

Arctic Oil & Gas Exploration

The company is involved in oil and gas exploration in Arctic regions.
>0% Revenue

Oil Sands Extraction

The company extracts oil sands.
>0% Revenue

Shale Energy Extraction

The company is involved in shale energy exploration and/or production.
>0% Revenue

Oil & Gas Production, Generation, or Supporting Products & Services

The company is involved in oil and gas exploration, production, refining, transportation and/or storage, and/or the generation of electricity from oil and/or gas.
>= 10% Revenue

Thermal Coal Power Generation

The company generates electricity from thermal coal.
>= 10% Revenue

Thermal Coal Supporting Products & Services

The company provides tailor-made products and services that support thermal coal extraction
>= 10% Revenue

Governance

Issuers with exposure to areas captured under the precautionary pool are considered to be part of the investible universe, but Sustainable portfolio managers considering such investments are alerted and encouraged to review the activity in consultation with the Newton responsible investment (RI) team (specifically an RI adviser), to ensure that the portfolio managers are comfortable that this investment is not in conflict with the objective of their strategy. Holdings of strategies that follow the Sustainable investment process are regularly reviewed at the sustainable investment forum (SIF).

Intended outcomes

Newton’s brand is built on the notion of ‘purpose’ – to deliver attractive outcomes to our clients, and help foster a healthy and vibrant world for all, through research-led investment.

The long-term viability of an investment requires decision-makers at issuers to understand and balance the needs of stakeholders. Our consideration of financially material environmental, social and governance (ESG)1 risks and opportunities is part of our broad investment approach that integrates financial analysis, thematic trends, macroeconomics and valuation considerations. This is at the heart of the “mosaic” theory approach to active asset management. We believe that a failure to consider ESG insights is likely to give an incomplete picture of the merits and risks of an investment opportunity

Key responsible investment (RI) principles for Newton include:

• Taking account of financially material and relevant ESG issues in our analysis of securities.
• Identifying opportunities for dialogue with corporate management and stakeholders on key ESG issues as part of our investment research.
• Using our informed judgement to vote at company meetings and on shareholder-proposed resolutions.
• Working with other investors and stakeholders to help drive and influence the consideration of financially material ESG factors.
• Having constructive dialogue with regulators; and
• Contributing to solutions to the systemic risks (such as climate change and social inequality) which might otherwise undermine our clients’ interests.

Our sustainable strategies seek to balance between the current, as well as the future needs of stakeholders so as to avoid short-termism and encourage a better allocation of capital that leads to improved long-term global outcomes for society and the environment alongside generating sustainable risk-adjusted returns for clients. As an investment house, NIM takes a long-term approach, which sustainable investing typically seeks to extend further than traditional approaches.

Process

Investment themes*

Fundamental research is the lifeblood of Newton, and our multidimensional research platform looks to deliver world-class insights in pursuit of the best outcomes for our clients. One of the key inputs to our research process is our investment themes, which help to shape our research agenda and support our portfolio construction.

We believe that themes – which represent powerful transformational ‘micro’ and ‘macro’ shifts across economies and industries – are only growing in importance, and that their influence on our investment landscape has never been greater. Themes can provide our investment team with a long-range lens to view clearly the structural changes that are taking place across the globe, and to look beyond often-superficial classifications like sectors or countries of domicile. They can alert the team to the new opportunities that change creates and help us to identify the emerging risks that threaten to impair the value of investments.

*Analysis of themes may vary depending on the type of security, investment rational and investment strategy. Newton will make investment decisions that are not based on themes and may conclude that other attributes of an investment outweigh the thematic structure the security has been assigned to.

Investment decisions

The Real Return team builds the portfolio from the best ideas from across the house. The analysts’ recommendations are framed in the context of themes which they believe will drive the global economy going forward. The context provided by these themes* can be global or region-specific. If a theme has particular prominence, it is likely to influence (among other factors such as the point in the market cycle) how much exposure there is to an individual security.

The portfolio is structured such that it has a return-seeking core and a stabilizing layer. The return-seeking core is designed to generate the lion’s share of the returns and is comprised of asset classes such as equities, corporate bonds, emerging market debt and alternatives. The stabilizing layer is comprised of both direct protection (derivative instruments) and indirect protection (for example government bonds and gold). The allocation between the two layers is determined by the team’s views on the global macroeconomic backdrop.

Once the allocation to the return-seeking core and stabilizing layer has been established, the team focuses on the composition of those areas. There is no predetermined asset allocation and individual securities are evaluated on a case-by-case basis in the context of the overall portfolio.

There are also a number of additional portfolio construction considerations that feed into the process: security valuations are assessed, as well as how individual holdings fit together within the core. Moreover, as each new idea is added to the portfolio, the team evaluates whether it is providing genuine diversification or if they are doubling up on our risk exposure in a particular area. We are constantly evolving the breadth of asset classes held in the strategy as the market itself develops. The ultimate aim of the return-seeking core construction process is to harvest alpha. Once the return-seeking core is assembled, the stabilizing layer is used to either dampen or increase the volatility and equity risk beta, based on where we are in the market cycle. The team identifies the risks in the portfolio that it wants to hedge and considers the cost of doing so as well as the opportunity cost. The simplest strategy used is to buy put options or futures on equity indices to hedge out market risk. Depending on the team’s view of the market, it may use shorter-term put options to hedge a varying proportion of the market risk in their equity holdings. The team also buys government bonds to provide a layer of downside protection. Depending on the team’s view of interest rates and level of protection, the team will buy different global government bonds and manage the duration. Gold is another asset used to act as a diversifier to hedge against a fall in equity markets.

The Newton Sustainable Real Return strategy depends on the input, perspective and interaction of a large number of individuals. However, the final capital allocation decisions for the strategy are the collective responsibility of Philip Shucksmith and Matthew Brown, along with input from the research analysts.

Unconstrained approach

At different points in time, we see certain business, investment and portfolio characteristics as important when seeking returns. We seek particular investment characteristics according to our long-term view on the global investment environment. Different environments lead us to change dynamically the size of the return-seeking core and to favor different security characteristics. The strategy is actively managed, and we are confident in our ability to meet our long-term objective in different market conditions, as a result of a very flexible and pragmatic investment approach. The flexibility afforded by the strategy's unconstrained nature allows the portfolio managers to adjust the portfolio's allocations nimbly to reflect changes in the market backdrop. The strategy is not compelled to invest in all asset classes at all times; instead, it takes a selective approach to investment in different asset classes on the basis of their underlying investment characteristics.

Please refer to our response given above for ESG Policy.

Resources, Affiliations & Corporate Strategies

RI Team

Newton has a centralised responsible investment team headed by Therese Niklasson, global head of sustainable investment. This team is the centre of excellence for all matters related to responsible investment, and with its deep functional knowledge of the responsible investment space and how it is evolving, it provides guidance, support and subject-matter expertise to our wider investment team. The responsible investment team, as you can see below, is global in its footprint and diverse in its employee base. The team is organised into three pillars of expertise – stewardship, research and analytics: these specialisations under the responsible investment umbrella allow us to bring further depth and expertise to each of these activities. The team’s compact size enables it to work cohesively and operate as one team.

Stewardship: Oversees the firm’s engagement framework and advocacy initiatives, focusing its efforts on meaningful outcomes for clients, and also undertakes the firm’s proxy voting activities. Provides subject-matter expertise to the investment team on governance risks and evolving expectations.

Sustainability research: Subject-matter experts consulting the investment and research teams, driving deep insights on sustainability-related subjects. The team manages Newton’s sustainability standards, definitions and frameworks.

Responsible investment analytics: Has strong quantitative and RI data expertise and owns the data ecosystem, creating and managing responsible investment data models, frameworks and tools that support ESG integration and sustainable investing. The team has built an innovative suite of building blocks that can be leveraged to develop scalable solutions to meet specific client requirements.

The role of the responsible investment team is to be a support function to the investment teams, to set standards around sustainable investment, and to coordinate and ensure effectiveness around our stewardship efforts. It guides the business around policies and direction of travel for sustainability and stewardship more broadly. The responsible investment team also owns and manages the overall governance systems to ensure we deliver against key codes and commitments including stewardship codes, industry principles such as the UN Principles for Responsible Investment, and industry pledges such as the Net Zero Asset Managers Initiative (NZAMi).

Supporting the team, and the wider business, are various external organisations and vendors including ESG service providers, memberships, and internal systems for monitoring and reporting.

Please see page 16 of the linked report for full RI team details:

https://www.newtonim.com/uk-institutional/special-document/responsible-investment-and-stewardship-annual-report/

ESG Governance

Management oversight

The Board has ultimate responsibility for ESG governance. They are supported by the following committees and working groups:

• Newton Executive Management Committee. The purpose of the Newton Executive Management Committee (NEMC) is to ensure the effective operational and strategic management of Newton. Newton’s Global Head of Sustainable Investment, Therese Niklasson, is a member of this committee and submits a formal update each month to the committee. Membership includes the CEO and Chief Risk Officer, and the committee provides formal approval of Newton’s annual sustainability and stewardship report. Reporting to the Board and the NEMC are Newton’s operating committees, some of which play varying roles in relation to Newton’s sustainability efforts, as described below.
• Newton Sustainability Committee. The Sustainability Committee (SC) meets on a quarterly basis and oversees all aspects relating to sustainability at Newton, including Newton’s sustainable framework, sustainable investments, direct impacts and engagement with communities, and engagement with financial markets (advocacy) regarding sustainability and stewardship matters. The SC review’s Newton’s investment universe from an ESG risk perspective, including climate and net-zero efforts. The committee was formed in 2022 and seeks to oversee the wider sustainability strategy, including climate and risk management, and ensure that it is delivered by Newton. It also reviews our strategy and progress around diversity, equity and inclusion (DE&I). The SC is chaired by Newton’s Global Head of Sustainable Investment and includes members of the NEMC as well as representatives from the investment team and risk and compliance.
• Newton Risk and Compliance Committee. This committee is supported by the Newton Conflicts of Interest Committee. These committees deal with various stewardship and responsible investment aspects on an ad-hoc basis, including any relevant internal audit findings and actions as well as climate risk updates from internal groups such as the Emerging Risks Working Group.

We have an oversight group, the Newton Sustainable Investment Forum (SIF), to provide support and challenge in relation to investments held in our sustainable strategies. This group is not a decision-making body but reports and escalates material issues to the Investment Oversight Committee, as well as to the Sustainability Committee, depending on the issue. The Investment Oversight Committee looks at process-oriented issues and the Sustainability Committee looks at framework and policy-related aspects stemming from the SIF. The SIF meets regularly and alternates between generic meetings and strategy-specific meetings that reflect different areas of sustainability focus (from sustainable to more impact-aligned products).

The formal role of the SIF is to:

• Conduct a review of existing and new holdings against portfolio objectives (where those objectives include specifically reference sustainability), our sustainable investment framework and any regulatory standards.
• Foster debate by bringing together a wider set of sustainability experts within the business.
• Provide support by educating, training and sharing knowledge and insights among the group.

While it is vital to monitor our existing sustainable strategies, it is equally important that we are thoughtful about launching any new products in this space. Therefore, we have the Newton Sustainable Products and Commercial Advisory Forum (SPCAF), which meets on an ad-hoc basis when new strategies are being planned with a sustainability proposition. This forum brings together members from the SIF and is intended as a peer review of the proposals in order to make sure we launch robust and thoughtful sustainability propositions that help our clients achieve their goals. The group provides advice back into the Newton Product and Commercial Committee.

Memberships and Affiliations

NIM has been a PRI signatory since February 2007, ten months after the PRI’s inception.

As investors and an intermediary in the financial system we play an important role in providing investors with access to investment solutions, and that with this comes an inherent responsibility to do what is right on behalf of our clients, as well as wider asset owners and stakeholders in the financial system. Our advocacy focus involves supporting or seeking to influence various issues and areas for the long-term interest of our clients and Newton.

A full list of collaborative initiatives in which we participated in 2023 is provided below.

Organisations and initiatives related to ESG matters in which Newton played a formal role in 2023:

• 30% Club – Investor Group
• Member of Race Equity Working Group
• Farm Animal Investment Risk and Return (FAIRR)
• Institutional Investors Group on Climate Change
• Member of Proxy Advisory Working Group (from 2022)
• Investment Association
• Member of Green Gilts Working Group
• World Benchmarking Alliance
• Member of Just Transition Coalition Impact Committee
• Asian Corporate Governance Association
• Education, research and policy influencer across Asian markets on governance matters.
• Global Investor Commission on Mining 2030
• CDP
• Climate Action 100+
• Council of Institutional Investors
• ShareAction Good Work Coalition
• ShareAction coalition focused on quality work, including a specific living wage campaign.
• ShareAction Investor Decarbonisation Initiative
• Investor Alliance for Human Rights
• Investor Coalition on Food Policy
• Taskforce for Nature-related Financial Disclosure Forum
• Investor Stewardship Group
• Transition Pathway Initiative

Newton is a signatory to or a supporter of the following industry principles and pledges:

• Net Zero Asset Managers initiative
• Principles for Responsible Investment
• Taskforce for Climate-related Financial Disclosures
• UK Stewardship Code
• UK Financial Reporting Council’s principles for stewardship expectations of UK investors.

Dialshifter

Our organization is helping to support the Paris Climate Agreement and the Race to Net Zero by...

NIM became a signatory to the Net Zero Asset Managers Initiative in March 2021. We have published details of our approach here: https://www.newtonim.com/uk-institutional/insights/net-zero/.

We have aligned ourselves with an independent methodology produced by the Science Based Targets initiative (SBTi). We are committing to having 50% of our financial emissions covered by credible net-zero plans by 2030, with the aim of reaching 100% by 2040.

We seek to meet these headline targets via a range of transparent measures around investments in climate ‘solution providers’, engagement with fossil-fuel companies to support their energy transition and advocating for supportive government and industry regulation.

Literature

• Fund overview & literature (including factsheet)
• Governance Principles & Voting Guidelines
• TCFD Disclosure Report
• Strategy Quarterly Responsible Investment Report
• Prospectus

IMPORTANT INFORMATION

Past performance is not a guide to future performance.
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
For Professional Clients only.
Provided solely for use by Fund EcoMarket.

The Fund is a sub-fund of BNY Mellon Investment Funds, an open-ended investment company with variable capital (ICVC) with limited liability between sub-funds. Incorporated in England and Wales: registered number IC27. The Authorised Corporate Director (ACD) is BNY Mellon Fund Managers Limited (BNY MFM), incorporated in England and Wales: No. 1998251. Registered address: BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Authorised and regulated by the Financial Conduct Authority.
Any views and opinions are those of the Investment Manager unless otherwise noted and is not investment advice.
Portfolio holdings are subject to change, for information only and are not investment recommendations.
BNY, BNY Mellon and Bank of New York Mellon are the corporate brands of The Bank of New York Mellon Corporation and may be used to reference the corporation as a whole and/or its various subsidiaries generally.
Issued in the UK by BNY Mellon Investment Management EMEA Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA. Registered in England No. 1118580. Authorised and regulated by the Financial Conduct Authority.
Assets under management (AUM) relates to the combined assets managed by the Newton Investment Management group. From 1 September 2021, Newton group of companies includes Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA).
Fund performance for the Institutional Shares W (Accumulation) share class calculated as total return, including reinvested income net of UK tax and charges, based on net asset value. All figures are in GBP terms. The impact of an initial charge (currently not applied) can be material on the performance of your investment. Further information is available upon request.
Costs incurred when purchasing, holding, converting or selling any investment, will impact returns.
Costs may increase or decrease as a result of currency and exchange rate fluctuations.
Benchmark: The Fund will measure its performance before fees against SONIA (30-day compounded) +4% per annum over five years as a target benchmark (the "Benchmark"). SONIA is a nearly risk-free rate meaning no bank credit risk is included, the rate can rise or fall as a result of central bank policy decisions or changing economic conditions. The Fund will use the Benchmark as a target for the Fund's performance to match or exceed because, in typical market conditions, it represents a target that will be equal to or greater than UK inflation rates over the same period and is commensurate with the Investment Manager's approach. The Fund is actively managed, which means the Investment Manager has discretion over the selection of investments, subject to the investment objective and policies as disclosed in the Prospectus.

RISK WARNINGS
For a full list of risks applicable to this fund, please refer to the Prospectus or other offering documents.
Please refer to the prospectus, and the KIID/KID before making any investment decisions. Go to www.bnymellonim.com.

Risk factors:
-Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect ("Stock Connect") risk: The Fund may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the Fund's ability to achieve its investment objective.
-Performance Aim Risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Funds which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
-Currency Risk: This Fund invests in international markets which means it is exposed to changes in currency rates which could affect the value of the Fund. Derivatives Risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the Fund can lose significantly more than the amount it has invested in derivatives. Changes in Interest Rates & Inflation Risk: Investments in bonds/ money market securities are affected by interest rates and inflation trends which may negatively affect the value of the Fund.
-Credit Ratings and Unrated Securities Risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the Fund.
-Credit Risk: The issuer of a security held by the Fund may not pay income or repay capital to the Fund when due. Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices. Charges to Capital: The Fund takes its charges from the capital of the Fund. Investors should be aware that this has the effect of lowering the capital value of your investment and limiting the potential for future capital growth. On redemption, you may not receive back the full amount you initially invested.
-China Interbank Bond Market and Bond Connect risk: The Fund may invest in China interbank bond market through connection between the related Mainland and Hong Kong financial infrastructure institutions. These may be subject to regulatory changes, settlement risk and quota limitations. An operational constraint such as a suspension in trading could negatively affect the Fund's ability to achieve its investment objective.
-Sustainable Funds Risk: The Fund follows a sustainable investment approach, which may cause it to perform differently than funds that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The Fund will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
-CoCo's Risk: Contingent Convertible Securities (CoCo's) convert from debt to equity when the issuer's capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
-Counterparty Risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the Fund to financial loss.
-Investment in Infrastructure Companies Risk: The value of investments in Infrastructure Companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.

A complete description of risk factors is set out in the Prospectus in the section entitled "Risk Factors"

Last amended: 30/07/24 09:59