The Trust is managed to invest in a broadly diversified portfolio of intermediate term domestic and global fixed interest and money market securities, whilst taking into account certain environmental and sustainability impact and social considerations. Ordinarily, the Trust will invest in securities with a maximum maturity of 15 years from the date of settlement.
Subject to portfolio maturity and credit quality controls, the Trust seeks to maximise the return of the portfolio. The Trust aims to hedge all foreign currency exposure to the Australian dollar (for the AUD class units) or the New Zealand dollar (for the NZD class units).
Dimensional takes certain labour standards, environmental, social and ethical considerations into account when selecting, retaining or realising investments of the Trust.
Dimensional applies these criteria to determine whether, relative to a portfolio without these considerations, the Trust should exclude, underweight, overweight or make no weight adjustment for that security.
In considering environmental and sustainability impact and other social factors (“Sustainability Criteria”) that Dimensional believes may be important to investors, Dimensional may consider carbon and other greenhouse emissions, or potential emissions, land use, biodiversity, involvement in toxic spills or releases, operational waste, water use, tobacco, child labour, alcohol, adult entertainment, gambling, factory farming activities, palm oil, personal firearms, manufacture of cluster munitions and landmines and manufacture and maintenance of nuclear weapon systems among other factors. In particular, Dimensional may exclude securities of issuers that Dimensional considers to have high carbon or greenhouse gas emissions or reserves that may produce those emissions.
Based on research and ratings information, Dimensional will determine an overall impact score for the issuer of the security and will consider that impact score when determining whether the security should, relative to a portfolio without these considerations: (i) be excluded from the Trust’s securities holdings; (ii) have its weight decreased within the Trust; (iii) be held with no adjustment to its weight within the Trust; or (iv) have its weight increased within the Trust.
Dimensional may also exclude or decrease the weight of specific securities due to concerns over any specific factor. These Sustainability Criteria, impact scores and other security weightings are subject to review and amendment by Dimensional. Dimensional may engage third party service providers to provide research and/or ratings information related to the Sustainability Criteria with respect to securities in the Trust, where information is available from such providers.
For the Sustainability Trusts that are Fixed Interest Trusts, in addition to excluding or underweighting securities of corporate issuers based upon the Trust’s Sustainability Criteria, the Trust also will generally exclude or underweight securities of supranational organisations and certain nonsovereign governmental agencies that may be less sustainable as compared to other similar issuers, based upon the Trust’s Sustainability Criteria. The Trust’s investments in securities of sovereign issuers are generally not subject to the Sustainability Criteria identified above. Dimensional, however, considers securities issued by governmental, quasi-governmental, governmental agency and instrumentality, and supranational agency issuers to be consistent with the Trust’s strategy of investing in sustainable investments.
Sustainability Criteria and impact scores are generally reviewed in accordance with updates from third party service providers where these are used generally on at least an annual basis. When, upon review, an investment no longer complies with the investment guidelines (or its impact score changes), Dimensional will generally take a patient approach to either divestment or appropriate changes to weightings.