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26 April 2018, Sweden | Mutual Funds | News

Making Catella Hedgefond even more sustainable

Catella began a journey in 2009 to integrate sustainability into our investment process by becoming a signatory to the UN Principles for Responsible Investment, committing ourselves to addressing environmental, social and governance issues in our decision making, and to promoting greater transparency and openness on these issues.

This work has intensified over the past two years, both within each fund and at an overall level. Catella Sverige Aktiv Hållbarhet is our sustainability flagship. The fund actively seeks out companies that incorporate sustainability into their business concept, while deselecting companies that we consider make a negative contribution to global challenges. In our other funds we have also clarified and improved the processes surrounding sustainability, and it is now the turn of Catella Hedgefond. In order to make the fund sustainable, we have chosen to exclude the sectors that we consider harmful to health or the environment, such as tobacco, alcohol and commercial gambling. We entirely avoid investments in weapons and pornography. When it comes to fossil fuels, we have completely ruled out companies involved in coal production. In addition, we make tougher demands for sustainability when it comes to companies in manufacturing and services before making an investment.

In order to assure our limits and restrictions, we use an external partner - Systainalytics, an independent evaluator. Their analysis adds to our own company research to enhance our efforts. Systainalytics evaluates companies' sustainability efforts and monitors current controversies and problems that companies have in relation to international norms and conventions. This becomes an input in our management process as we review the companies ourselves.

Is it possible to make money on companies that conduct unsustainable business? Because we are able to short sell in Catella Hedgefond we can also make money when things go badly for these stocks. This might apply, for example, to companies whose risks are not properly priced by the market. So, the answer is yes, we can make money on unsustainable companies through short selling if our portfolio managers choose to do so.

The exclusion applies to all companies in the excluded industries, both stocks and bonds, which is not particularly common practice.

For oil producers we have set a higher threshold for sustainability work within the companies. We look particularly closely at companies in this category that receive low ratings from Systainalytics. If the low rating is due to something the company can fix itself, we choose to start a dialogue and keep the company in the portfolio. We want our engagement to contribute to improving their sustainability efforts.

There is still plenty left that we can do at Catella when it comes to sustainability. Putting our hedge fund on the sustainability map is an incredibly important step in this work!

CATELLA HEDGEFOND

SUSTAINABLE INVESTMENT

Sweden

Anna Strömberg

Fund manager / Sustainability Manger
Direct: +46 8 614 25 76
Sweden

Thomas Elofsson

Head of Portfolio Management and Fund manager
Direct: +46 8 614 25 62
Sweden

Peter Elmhorn

Head of Sales
Direct: +46 8 614 25 06

Risk information

Investments in fund units are associated with risk. Past performance is no guarantee of future returns. The money invested in a fund can increase and decrease in value and it is not certain that you will get back the full amount invested. No consideration is given to inflation. The Catella Balanserad, Catella Credit Opportunity and Catella Hedgefond funds are special funds under the Swedish Alternative Investment Fund Managers Act (SFS 2013:561) (AIFM). Catella Sverige Aktiv Hållbarhet and Catella Småbolagsfond may use derivatives, and the value of the funds may vary significantly over time. The value of Catella Sverige Hållbart Beta may vary significantly over time. Catella Avkastningsfond may use derivatives and may have a larger proportion of the fund invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds, in accordance with Chapter 5, Article 8 of the Swedish Investment Funds Act (SFS 2004:46). Catella Nordic Long Short Equity and Catella Nordic Corporate Bond Flex may use derivatives and may have a greater proportion of the funds invested in bonds and other debt instruments issued by individual national and local authorities and within the EEA than other investment funds. For more details, complete prospectuses, key investor information, and annual and half-yearly reports, please refer to our website at catella.se/fonder or phone +46 8 614 25 00.

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