The AMP Capital Hedged Global Fixed Interest Fund is a diversified portfolio of international fixed interest securities using a combination of specialist investment managers within a sustainable and responsible framework Recognising that environmental, social and ethical considerations, labour standards and corporate governance factors can positively impact long-term business success, the portfolio targets competitive investment performance with clear social and environmental outcomes. The multiple manager approach provides exposure to a range of sectors and securities as well as diversification across investment approaches.
The objective of the AMP Capital Hedged Global Fixed Interest Fund is to outperform, over the medium term, the weighted average return of the market indices used to measure performance of the underlying funds/assets in which the fund invests.
The Responsible Investment Charter requires the underlying managers to the fund to:
> not invest in companies with any exposure to tobacco manufacturing (0% revenue threshold);
> not invest in companies with a material exposure (10% of revenue) to gambling; alcohol; pornography; uranium (and nuclear power) and armaments;
> not invest in companies with a material exposure (20% of company value) to thermal coal mining; brown coal power generation; oil sands production; transport infrastructure associated with oil sands; and coal to oil or gas processes;
> invest in green bonds (up to 30% of the funds' corporate fixed income allocation);
> invest in the better performing companies in other sectors.
The Responsible Investment Ethics Committee regularly reviews portfolio holdings and as a result of the review may require the underlying manager to justify the ESG rationale for holding a particular company. If the Ethics Committee is not satisfied with the response it may either a) request the underlying manager to engage with the company on the particular ESG issue(s) of concern b) require divestment of the company. If it is concluded that the company is to be divested, the rationale for the divestment is reviewed every two years, to see if divestment is still appropriate.
Engaging with companies and policy makers on important ESG issues is a key feature of the fund. We currently have four key engagement themes:
> Climate change
> Human rights and supply chain
> Sugar and obesity
> Responsible finance, including payday lending
> Corporate governance
In addition, the fund engages with individual companies on company specific issues or topical ESG issues including ethics in the banking sector, sugar and anti-microbial resistance.