The Index will exclude companies, subject to materiality thresholds identified by MSCI, with revenue from or business activities involving: tobacco; cluster bombs; landmines; chemical and biological weapons; nuclear weapons; and depleted uranium. Companies with very severe ("Red Flagged") customer, environment, governance, human rights, or labour controversies are also excluded. The Index will also have a bias towards companies with higher environmental, social and governance (ESG) ratings and away from those with high carbon emissions. Further information about the MSCI methodology is available on www.msci.com.
In managing the Fund, our primary investment approach is full replication of the Index. The goal of the indexed strategy is to mirror the returns and characteristics of the underlying benchmark. As a result, we will attempt to hold each stock in the benchmark in approximately the same weight as it appears in the Index. Our strategy is to buy and hold securities, trading only when there is a change to the index, investor cash flows, or to reinvest cash from dividend income, tax reclaims or corporate actions. This approach minimises tracking error and transaction costs due to its low turnover.
The Fund is suitable for investors seeking capital growth over the long-term through a diversified portfolio of international equities.