Investment decisions involving Art. 8 and Art. 9 funds are made on the basis of a fundamental research process (cash flow, among others). The principle of ESG integration is also anchored in all investment decisions. ESG integration is the systematic inclusion of sustainability factors in the key steps of the investment process. The remaining funds are referred to as Art. 6 funds. These are characterized by the fact that they do not integrate sustainability aspects into the investment process. A categorization of the funds can be found in the product information section.

Exclusion criteria (negative criteria)

Investments in companies that in the view of the management company or the AIFM so not fulfill the sustainability standards of the sub-funds are excluded. The management company has defined exclusion guidelines that among other aspects specify company exclusions and tolerance thresholds for activities involving alcohol, tobacco, gambling, weapons, and adult entertainment.

Analysis (positive criteria)

As a responsible management company, we consider it part of our obligation as trustees to actively manage ESG risks and opportunities. We procure ESG-related analyses alongside conventional financial analyses to identify sustainability risks of target companies within the investment universe (corporate bonds and stock positions). To fulfill ecological and social factors, the assets of the UCI are subject to an ESG rating. The ESG rating shows the exposure of each company to the key ESG factors. It is based on a detailed list of business activities, main products and segments, locations, assets and income as well as other relevant parameters such as outshored production, etc.

Active ownership

We are convinced that actively exercising voting rights contributes to the values and conduct of corporations. With our commitment, we encourage companies to adopt best-practice corporate governance standards. In exercising voting rights, IFM considers internal directives involving voting rights policies according to which voting and creditor rights are basically exercised when the number of votes in a company, consolidated at the level of the management company or AIFM, amounts to more than one percent of the voting capital. As it designs commitments with companies, IFM closely collaborates with proxy voting providers and combines their analyses with the investment policy of the respective fund. For further information, please consult our directive “Voting rights policy” of IFM Independent Fund Management AG.

https://www.ifm.li/files/attachments/Stimmrechtspolitik.pdf?t=061221181423

Sustainability

Sustainability embraces environmental (E), social (S), and governance (G) factors. The respective UCI pursues an overall ESG approach with which the sustainable alignment of the respective UCI is assured by considering various sustainability factors. Among others, sustainability factors include employee, social, and environmental issues, the observance of human rights, and the prevention of corruption and bribery.

ESG data

In their investment strategy, IFM and its agents apply ESG criteria provided by one or several external ESG data sources that may be incomplete, incorrect, different, or not available. Therefore, there is a risk that IFM and its agents incorrectly assesses a security or an issuer so that a security is erroneously added to or excluded from the portfolio of the UCITS.

The option to consider key negative sustainability effects depends largely on the availability of pertinent information in the market. Not all assets in which the funds managed by IFM invests are backed by the availability of relevant data of sufficient quality and quantity.