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As part of the strategic realignment of central investment processes according to sustainability aspects, FERI will offer the "FERI Sustainable Quality" fund (previously "FERI Global Quality") as an Article 8 product in accordance with the EU transparency obligation for sustainable financial products in the future. "This step is the logical development of our sustainability approach, which we have already consistently implemented for years," says Antje Biber, Head of the FERI SDG Office.
In accordance with the new EU Directive, the fund management of the "FERI Sustainable Quality" is committed to disclosing sustainability aspects when selecting stocks. FERI follows a comprehensive and independent evaluation method that uses its own scoring model in addition to exclusion criteria, such as for ethically controversial sectors and CO2-intensive industries. Financially relevant sustainability characteristics are analysed and compared with the quantitative and qualitative assessments of the most important data providers. With this methodology, FERI goes significantly further than the ESG ratings offered in the market. "We look closely at how well a company manages ethical, social, environmental and governance-related risks. This analysis has a significant influence on our return expectations and portfolio allocation," says Lars Konrad, fund manager of "FERI Sustainable Quality" and Head of Global Equities at FERI (Switzerland) AG.
The fund focuses on profitable and high-growth companies from the investment universe of the MSCI World Index that have a strong sustainability profile. For example, around 63% of the companies in the portfolio have committed to the Paris climate agreement, of which 40% have committed to the 1.5°C target. By comparison, in the benchmark MSCI World Index, the proportion of companies that are not in line with the Paris climate agreement targets is 66 percent. CO2 emissions within the portfolio (per million sales) are 27 percent lower than those within the MSCI World Index. And the proportion of companies with a high level of corporate governance in the Sustainable Quality fund is 62 percent, twice that of the MSCI World Index.
The fund management's declared aim is also to achieve a high level of impact in relation to the UN's Sustainable Development Goals (SDGs). By defining 17 goals, the United Nations promotes sustainable development at environmental, social and economic levels. With regard to the top 10 SDGs, which include measures to protect the climate, secure basic needs and reduce inequality, the fund performs significantly better than the benchmark index in each case. Overall, the fund receives the highest rating of AAA ("Leader") from MSCI ESG Research. In contrast, the MSCI World Index only comes in at A-rating ("Average"). "We continuously monitor the companies we invest in to ensure that the portfolio not only meets return expectations, but also sustainability targets," adds Konrad.
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