Postbank

The Sub-Fund aims to provide a medium/long-term capital growth by combining total return with equal focus on environmental, social and governance (ESG) factors, ensuring a tilt to responsible investing. To achieve this, the Sub-Fund will follow a flexible allocation strategy. The Sub-Fund will invest at least 51% of its assets in mutual funds which mainly invest in equity securities, transferable debt securities and derivatives that meet the Investment Manager’s ESG/Sustainability criteria such as scores and/or ratings established and/or provided by internationally accredited agencies and providers such as Morningstar or Bloomberg indicatively but not exclusively. For that purpose, an investable universe of suitable mutual funds is in place and updated at least annually (annual review). Secondarily, the Sub-Fund may invest its assets in mutual funds including Exchange Traded Funds (ETF’s) which mainly invest in bank deposits, money market instruments, short term bonds and/or any other equivalent investments; In addition, the Sub-Fund may and will at times invest (up to 50% of its net assets) directly in bank deposits and money market instruments in adherence to the flexibility objective. Any investment in short-term or liquid assets does not have to meet the aforementioned ESG/Sustainability criteria. This Sub-Fund promotes environmental and social characteristics and qualifies as product in accordance with Article 8 of SFDR.

What is the investment story “ESG”? Sustainability is the new doctrine. Sustainability is the process of maintaining growth, meeting the needs of the present without compromising the ability of future generations to meet their needs. Sustainability summarized in the 3Ps, it is about Profits, People and the Planet. It’s not a secular theme but the way forward. Climate change, millennials, institutional demand and technology drive such a push for responsible investments and products. In 2015, UN has adopted the 17 Sustainable Development Goals that drive governments and corporates towards a common goal, the “2030 Agenda”. PRI is an investor initiative in partnership with UNEP Finance Initiative and UN Global Compact. ESG is an investment process and each letter stands for Environmental risks, Social risks and Governance risks. The investment process involves a deep understanding of risks and opportunities associated with each key business factor and performance driver. The ESG analysis enriches the investment process, generating sustainable long-term returns. Companies that actively apply ESG/sustainability principles tend to have higher credit ratings, lower cost of capital, stronger finances and better share price performance.Funds Facts The ESG Integration into the Fund of Funds investment process consists of: Portfolios of securities that can be measured against key ESG factors and risks by suitable rating agencies like Sustainalytics, Mercer, MSCI etc. A score that can be assigned in each factor, component scores and ratings –all available via Bloomberg, Morningstar Direct or other media. The selection of the funds is based on a structured evaluation/selection process. ESG Focus is a flexible allocation fund of funds that can invest equally in equities and/or bonds (UCITS). The fund asset managers intend to be invested in equities between 75% and 95% when the environment for risky assets is positive, intend to be more balanced 60-40% (equities vs. fixed income) in volatile times, and from time to time, may go ultra defensive if the Investment Committee / Strategy decides so.

During the quarter ending 29/12, major equity markets rallied. MSCI US gained the most with +6.88%, MSCI AC World gained +6.12%, MSCI Europe returned +6.11% and MSCI Japan +3.22% in Euro terms. Outside of the developed markets, GEMs outperformed with the MSCI EM gaining +3.01%. The Dollar depreciated against the Euro dropping by -4.13% during the same period, with the ECB Ref. set at 1.105 on 29/12.

For the 4th quarter, the sub-fund had an average equities exposure of 89.19% (between 81.39% and 95.00%), average bonds exposure of 1.95% and an average cash exposure of 8.86%. For the 4th quarter, the sub-fund had an average US & N.America equity exposure of 53.92% (between 49.27% and 57.65%), average European equity exposure of 25.52% (between 23.67% and 26.60%), average exposure in Japan of 3.64% (between 3.15% and 4.10%) and an average exposure in emerging markets and/or other regions of 6.11% (between 5.29% and 6.87%).