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Magellan Core ESG Fund (Managed Fund)

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About this Fund

Fund Detail

PDS https://informedinvestor.com.au/view/pds/106387-2024-01-19-02:36.pdf
FUND MANAGER Magellan Asset Management
ASX Code MCSE*
APIR MGE8722AU
ASSET CLASS GLOBAL EQUITIES
INVESTMENT STYLE

The Fund will primarily invest in securities of companies listed on stock exchanges around the world but will also have some exposure to cash.

INVESTMENT PROFILE

The Fund seeks to achieve attractive risk-adjusted returns over the medium to long term while incorporating consideration of ESG risks and the application of a proprietary low carbon framework.

CURRENCY MANAGEMENT Unhedged
INCEPTION DATE 11-12-2020
BENCHMARK MSCI World Net Total Return Index (AUD)
FUND SIZE MSCI World Net Total Return Index (AUD)
DISTRIBUTION FREQUENCY Half-yearly
NO. OF HOLDINGS 70-90
FEES 0.51% p.a.
STRUCTURE

Benefits

Benefits

Significant benefits

  • Investing in the Fund offers investors a range of benefits, including:
    access to the Investment Manager’s investment expertise and a professionally managed global equity portfolio;
  • access to attractive listed global infrastructure investment opportunities;and
  • participation in any capital appreciation and income distributions of the Fund.

The Investment Manager believes that issues relating to labour standards and to environmental, social and ethical considerations have the potential to affect the business outcomes of the Fund’s investment companies. Accordingly, the Investment Manager reviews labour standards, environmental, social and ethical considerations as part of the risk assessment that is completed when reviewing the quality of a company and its risk exposures. A broad spectrum of ESG issues are assessed for their materiality of impact on the future earnings and risks of companies.

The Investment Manager considers amongst other risk factors and where applicable: environmental issues, such as climate change and pollution; social issues, such as human rights and health and safety; and corporate governance issues, such as governance and compensation structures.

The choice of relevant ESG factors for any company will vary by industry and company and are considered by the Investment Manager both prior to investment and on an on-going basis thereafter.

RISK LEVEL 6
INVESTOR SUITABILITY

To be held for at least 7 to 10 years.

Risks

Title
Detail

Key Features

Significant features

The Fund’s primary investment objective is to achieve attractive risk-adjusted returns over the medium to long term through investment in a diversified portfolio of high quality companies.

This objective incorporates consideration of environmental, social and governance (ESG) risks and the application of a proprietary low carbon framework.
The Investment Manager aims to invest in companies that have sustained competitive advantages which translate to returns on capital in excess of their cost of capital for a sustained period of time. The Fund will comprise 70 to 90 investments based on the Investment Manager’s assessment of economic moat, potential impact of disruption, ESG risks and opportunities, value and key risks and exposures.

The Fund will be rebalanced on a quarterly basis, or on such other basis determined by the Investment Manager.

The Investment Manager believes that issues relating to labour standards and to environmental, social and ethical considerations have the potential to affect the business outcomes of the Fund’s investment companies. A broad spectrum of ESG issues are assessed for their materiality of impact on the future earnings and risks of companies. The choice of relevant ESG factors for any company will vary by industry and company and are considered by the Investment Manager both prior to investment and on an on-going basis thereafter.

The Investment Manager will exclude companies whose activities, as assessed by the Investment Manager, may have wide-ranging 
detrimental impacts on society. Materiality is normally assessed as greater than 10% of a company’s revenues exposed to the exclusionary activity. If an existing investment is subsequently assessed as meeting the exclusionary criteria, the Investment Manager will seek an orderly sale of that investment within three months.

The Investment Manager incorporates a proprietary low-carbon emissions overlay into portfolio construction. Globally agreed climate goals such as those defined in the 2015 Paris Agreement provide the guiding framework for the Fund.

It is not the Investment Manager’s intention to hedge the foreign currency exposure of the Fund arising from investments in overseas markets. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases. The Fund may use exchange traded derivatives, in a limited manner, for risk management purposes

Mandate

How we invest your money

The Fund’s assets are typically invested within the following asset allocation ranges:

(Asset Class: Investment Range)

  • Global listed securities: 90% - 100%
  • Cash and cash equivalents: 0% - 10%

The Investment Manager will exclude companies whose activities, as assessed by the Investment Manager, may have wide-ranging detrimental impacts on society. These exclusions encompass companies with material exposures to the production of tobacco products, “high-roller” casinos, that is casinos targeting high-stakes gaming susceptible to money laundering activities, as well as companies involved in the production of alcohol, adult entertainment and hand-guns. Materiality is normally assessed as greater than 10% of a company’s revenues exposed to the exclusionary activity. If an existing investment is subsequently assessed as meeting the aforementioned exclusionary criteria, the Investment Manager will seek an orderly sale of that investment within three months.

The Investment Manager incorporates a proprietary low-carbon emissions overlay into portfolio construction. Globally agreed climate goals such as those defined in the 2015 Paris Agreement provide the guiding framework for the Fund.

The Fund primarily invests in the securities of companies listed on stock exchanges around the world but will also have some exposure to cash and cash equivalents. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases. The Fund may also use exchange traded derivatives, in a limited manner, for risk management purposes. It is not the Responsible Entity’s intention to hedge the foreign currency exposure of the Fund arising from investments in overseas markets.