Morphic Ethical Equities Fund

Product Name

Morphic Ethical Equities Fund

Issuer

Morphic Asset Management

Category

Investment

Type

Listed Investment Company (LIC)

Target

Retail, Wholesale

Certified Since

2017

Asset Classes

International equities

Markets

Australia, New Zealand

Investment Approaches

Negative Screening, ESG Integration

It Includes:

  • Riaa icons 14 Education
  • Riaa icons 10 Renewable energy and energy efficiency
  • Riaa icons 15 Social and sustainable infrastructure
  • Riaa icons 13 Sustainable transport
  • Riaa icons 31 Sustainable water
  • Investment2 More sustainable companies

It has some level of screening for:

  • Riaa icons 33 Fossil fuels

It fully excludes:

  • Riaa icons 41 Alcohol
  • Riaa icons 36 Armaments
  • Riaa icons 42 Gambling
  • Riaa icons 52 Human rights abuses
  • Riaa icons 38 Labour rights violations
  • Riaa icons 34 Logging
  • Riaa icons 99 Pornography
  • Riaa icons 35 Tobacco

Overview

The Fund seeks to invest in companies which provide products and services that we consider are likely to improve the planet such as (but not limited to): Finding solutions for reducing the emission of greenhouse gases; Reducing damage to water supplies; Working to improve air quality; Providing alternatives to deforestation; Otherwise enhancing the human experience without creating future problems for mankind or the environment. The fund applies a “negative screen” that prohibits direct investment in securities issued by companies in various industries which have material negative environmental or social impacts. The Fund integrates ESG analysis of all direct holdings. The investment team engages with all companies the Fund is invested in (directly), seeking clarification on material ESG issues and providing feedback. Finally, the Manager, donates part of its revenue to a variety of charities supporting different causes and manages funds on behalf of charities on a pro bono basis.


Description


The Fund is managed in accordance with Morphic’s Ethical Charter (https://morphicasset.com/wp-content/uploads/2017/11/Morphic_Ethical_Charter_W05.compressed.pdf) and labour standards, environmental, social and governance considerations. To achieve the objectives embodied by Morphic’s Ethical Charter, we construct the Portfolio by applying a “negative screen” that prohibits direct investments issued by entities (including their subsidiary entities) in various industries. 

The Fund does not directly invest in companies that have significant part of their business activities in armaments, tobacco and alcohol, gambling, coal and Uranium mining, oil and gas extraction, intensive animal farming and aquaculture and logging of rainforest or old growth timber. Additionally, we exclude any companies that appear in the Norges Bank Investment Management Exclusion list (https://www.nbim.no/en/responsibility/exclusion-of-companies/).

If the Company has indirect exposure to Excluded Securities by investing in Derivatives (including Exchange Traded Funds), the Company will seek to hedge this indirect exposure using Short sales.

In the event that a company operates in a sector which is not excluded by the negative screen but has greater than 5% of its revenues from an activity which would otherwise be excluded then investment will be prohibited. The negative screen is enhanced by our research process which incorporates the identification and consideration of material ESG risks and opportunities for every potential and actual investment.

We also apply a “positive screen” by generally investing a minimum of 5% of the Fund in entities which produce products or services that it considers are likely to improve the planet. The criteria for investments that would fall within the scope of the "positive screen" is set out in the Manager's Ethical Charter.
 
Additionally, the Morphic Responsible Investment and Proxy Voting policies apply to all funds managed by Morphic Asset Management. As well as detailing the negative and positive screens, these policies detail the methodology by which consideration of Environmental, Social and Governance issues is integrated into our investment process. It also details our commitment and approach to Stewardship (Engagement and Proxy Voting) and Transparency.

Other products certified by the Responsible Investment Association Australasia (RIAA)

Morphic Global Opportunities Fund

Sign up to join the Responsible Returns newsletter