Perpetual WealthFocus Super Plan-Ethical SRI Option

Product Name

Perpetual WealthFocus Super Plan-Ethical SRI Option

Issuer

Perpetual

Category

Superannuation

Type

Superfund option

Target

Retail

Certified Since

2005

Asset Classes

Australian only equities

Markets

Australia, New Zealand

Investment Approaches

Negative Screening, Positive Screening

It Includes:

    It fully excludes:

    • Riaa icons 41 Alcohol
    • Riaa icons 56 Animal cruelty
    • Riaa icons 36 Armaments
    • Riaa icons 33 Fossil fuels
    • Riaa icons 42 Gambling
    • Riaa icons 45 Genetic engineering
    • Riaa icons 52 Human rights abuses
    • Riaa icons 38 Labour rights violations
    • Riaa icons 50 Nuclear power
    • Riaa icons 99 Pornography
    • Riaa icons 35 Tobacco

    Overview

    Objective: Aims to provide long-term capital growth and regular income through investment in quality shares of ethical and socially responsible companies. The fund aims to outperform the S&P/ASX 300 Accumulation Index (before fees and taxes) over rolling three-year periods.


    Description


    Perpetual researches companies of all sizes using consistent share selection criteria. Perpetual’s priority is to select those companies that represent the best investment quality and are appropriately priced. In determining investment quality, investments are carefully selected on the basis of four key investment criteria:

    ·     conservative debt levels
    ·     sound management
    ·     quality business and
    ·     recurring earnings.

    In addition to the above investment approach, Perpetual utilises a strategy for screening ethical and socially responsible investments (see ‘Environmental, social and ethical factors and labour standards’) below.


    ENVIRONMENTAL, SOCIAL AND ETHICAL FACTORS AND LABOUR STANDARDS

    Perpetual is a signatory to the United Nations-supported Principles for Responsible Investment (PRI). PRI signatories undertake to consider environmental, social and corporate governance (ESG) factors in their investment decision-making and ownership practices.

    PERPETUAL ETHICAL SRI CREDIT FUND AND PERPETUAL WHOLESALE ETHICAL SRI FUND

    Perpetual evaluates companies, issuers and derivative counterparties (as applicable) that meet the investment approach, set out above, on a range of environmental, social, governance and ethical issues and labour standards to determine their suitability for inclusion/retention in, or divestment from, the portfolios of these Funds. We seek to invest in quality companies or issuers that have satisfied our range of ethical and socially responsible investment criteria.

    There are two main steps to the process, namely ethical exclusions and socially responsible investments (SRI) screening, utilising research from external specialists.

    ETHICAL EXCLUSIONS

    We don’t invest in companies or issuers that derive a material proportion of their revenue from:

    ·     the manufacture or sale of alcohol or tobacco
    ·     the operation of gambling facilities or the manufacture of gambling equipment
    ·     fossil fuels (upstream)
    ·     uranium and nuclear
    ·     animal cruelty (cosmetic testing)
    ·     genetic engineering
    ·     pornography
    ·     armaments (including weapons).

    SRI SCREENING

    Companies or issuers remaining after the ethical exclusions are then subject to an SRI screening to evaluate how their business practices impact society and the environment. The SRI screening involves three steps:

    1.  Negative scoring: Companies or issuers are scored on negative environmental, social and governance factors in relation to a number of criteria including the environment, labour standards, human rights, supply chain and corporate misconduct.

    2.  Positive scoring: Companies or issuers are scored on positive environmental, social and governance factors in relation to a number of criteria, including environmental improvement, labour standards, charity commitment and ethics.

    3.  Universe inclusion: Scores from all negative and positive screens are then combined. Companies or issuers with negative total scores are excluded while other companies become allowable investments.

    The Funds’ investments are regularly reviewed to determine whether they continue to pass the ethical SRI screening process when updated information is received. If we become aware that the Funds are invested in a company or issuer that no longer passes the ethical SRI screening process, the investment will be sold as soon as practical, in an orderly, price-sensitive manner.

    Where a company or issuer is not covered by our research provider, we may invest in the asset (following preliminary internal analysis) until coverage is initiated. Should the stock or issuer fail the screening process when coverage commences, the asset will be sold as described above.

    In rare circumstances where an issue that has caused an exclusion is deemed to be minor, we may override the exclusion for that issue, or for a period of time while the company or issuer rectifies the issue. These decisions are made independently of the Funds’ portfolio managers to ensure conflicts of interest do not occur.

    Emerging issues are monitored to ensure that the screening criteria remains relevant and in the spirit of the Funds. From time to time, and with the advice of our research provider, we may alter the screening criteria to take account of these emerging issues. We may engage with companies that are at risk from emerging issues to encourage them to consider the issue and improve their practices. We can modify the screening process for Perpetual Ethical SRI Credit Fund and Perpetual Wholesale Ethical SRI Fund at any time.

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

    Perpetual Ethical SRI Credit Fund

    Perpetual Wholesale Ethical SRI Fund

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