Notification of changes to the underlying fund of R63 Allianz Japan Equity
24 Apr 2023
We have received notification from the representatives of Allianz Global Investors Fund (SICAV) (the “Company”) of the following upcoming changes to the underlying fund of our R63 Allianz Japan Equity mirror fund (the “Affected Mirror Fund”). These changes will take effect from 30 May 2023 (the “Effective Date”).
Changes to the investment objective and investment restrictions
The Company has advised that in order to increase the integration of Environment, Social and Governance (“ESG”) factors consideration in the investment process, changes to the investment objective and investment restrictions of the Affected Mirror Fund will be implemented from the Effective Date.
Changes to investment strategy
From the Effective Date the investment strategy of the underlying fund of the Affected Mirror Fund will change from Climate Engagement with Outcome Strategy (including exclusion criteria) to Sustainability Key Performance Indicator Strategy (Relative) (“KPI Strategy (Relative)”) with a specific focus on greenhouse gas emissions (“GHG”) intensity.
In addition to the current investment objective to seek long-term capital growth by investing the Japanese equity markets, with the adoption of the KPI Strategy (Relative), the underlying fund of the Affected Mirror Fund will also seek to outperform its Benchmark by at least 20% in minimising the portfolios weighted average of the investee companies’ annual greenhouse gas emissions intensity in terms of annual sales over its Benchmark (“Sustainability KPI”).
With the adoption of the KPI Strategy (Relative), a minimum of 80% of the portfolio of the underlying fund of the Affected Mirror Fund, shall be evaluated by the “Weighted Average GHG Intensity (Sales)”. Portfolio in this respect does not comprise derivatives and instruments that are non-evaluated by nature (e.g., cash and Deposits).
GHG Intensity represents an issuer’s annual greenhouse gas emissions. Sales represents an issuer’s annual sales. GHG Intensity (in terms of sales) of an issuer is the issuer’s annual greenhouse gas emission (in metric tons of carbon dioxide equivalents (tCO2e) per millions of annual sales). This ratio of greenhouse gas emission normalised by sales facilitates comparison between issuers of different sizes. Weighted Average GHG Intensity (in terms of sales) is the weighted average of the GHG Intensity (in terms of sales) of the issuers of the securities composing the portfolio adjusted by their relative weights to the portfolio.
This means that the GHG Intensity (in terms of sales) of an issuer of a security is a key consideration of the investment process. In the portfolio construction process of the underlying fund of the Affected Mirror Fund, more GHG-efficient issuers in terms of the issuers’ sales would be more likely to be selected by the underlying fund Investment Manager, such that the underlying fund of the Affected Mirror Fund could achieve its Sustainability KPI as specified above. Third party data will be used to determine the GHG Intensity (in terms of sales) of an issuer.
Apart from the changes mentioned above, the other current investment policy and restrictions of the underlying fund of the Affected Mirror Fund will continue to apply.
Should you have any questions regarding these changes, please contact the Investment Marketing Team.
For more information regarding Allianz Global Investors funds visit https://www.allianzgi.com/