Environmental, Social and Governance Philosophy Statement

Fisher Investments believes ESG investors are best served by an investment process that considers both top-down and bottom-up factors. Integrating ESG analysis at the country, sector and stock levels consistent with clients’ investment goals and ESG policies maximises the likelihood of achieving desired performance and improving environmental and social conditions worldwide.


Introduction

Fisher Investments (FI) considers environmental, social and governance (ESG) factors throughout the investment process. Additionally, FI regularly screens and tailors the investment approach for separately managed accounts depending on the particular guidelines mandated by the client.

Top-Down Investment Process

  • ESG factors are among the many drivers considered by FI’s Capital Markets Analysts and FI’s IPC when developing country, sector and thematic preferences. Environmental regulation, social policy, economic and market reforms, labour, and human rights are among ESG factors assessed when determining country and sector/ industry allocations and shaping an initial prospect list of portfolio positions.
  • FI’s IPC, with the assistance of FI’s Securities and Capital Markets Analysts, determines the materiality of the ESG considerations based on the exposure among publically-traded companies in these categories. Higher materiality could imply larger ESG-related risks or opportunities, and may influence sector and country weight preferences as well as individual stock selection. The investment strategy and positioning reflects Fisher Investments’ outlook over a 12-18 month horizon.
  • At a client’s discretion, FI is able to refine prospective equity lists further by applying the firm’s or client‑provided ESG screens to the list of prospective securities for separately managed accounts. Please reference the appendix for a sample of the firm’s screens employed for most ESG portfolios. FI’s screening process leverages MSCI ESG Research capabilities to identify and remove portfolio candidates involved in business activities deemed inconsistent with FI’s, or client-provided, screens.

Bottom-Up Investment Process

FI’s Securities Analysts perform fundamental research on prospective investments to identify securities with strategic attributes consistent with the firm’s top-down views and competitive advantages relative to their defined peer group. The fundamental research process involves reviewing and evaluating a comprehensive set of qualitative and quantitative data, including ESG factors, prior to purchasing a security. Factors considered in portfolios include, but are not limited to: shareholder concentration, corporate stewardship, environmental opportunities & liabilities, and human or labour rights controversies. Generally, FI would choose not to invest in companies when, in its opinion, security level issues: (i) violate a client mandated ESG policy or (ii) present an inordinate risk to a company’s operational or financial performance or (iii) appear to present undue headline risk to share price performance.

Please see FI’s ESG Policy Statement for additional information.


As of 31/03/2022 we had over $19 billion USD in our ESG/SRI asset under management.


Shareholder Engagement Policy Disclosures

In accordance with Fisher Investments Ireland Limited’s (FII) shareholder engagement policy, please review the proxy voting reports provided on this page for the annual disclosure on how such policy has been implemented for the previous year. As noted in such policy, the proxy voting reports only include data for FII’s clients who have authorized and directed FII to vote proxies. Only certain Fisher Investments Institutional Group clients have given FII such authorization and direction. Therefore, there is no proxy voting report (and therefore no annual disclosure under FII’s shareholder engagement policy) for non-institutional clients of FII.

Sustainability-Related Disclosures

Date of Publication: 28 December 2022

To comply with the Sustainable Finance Disclosure Regulation (Regulation EU/2019/2088) as amended (“SFDR”), Fisher Investments Ireland Limited (“FII”) has provided the below sustainability-related disclosures that describe various policies related to sustainability and environmental, social and governance (“ESG”) factors, as well as information on ESG orientated strategies FII has available to institutional clients. Because FII delegates its portfolio management services to its parent company, Fisher Asset Management, LLC, trading as Fisher Investments (“FI”), subject to FII’s oversight, such policies and strategies are implemented by FI, but apply to FII’s services provided to FII’s institutional clients.

FI generally evaluates and integrates Sustainability Risks and ESG factors at multiple stages throughout the investment process. “Sustainability Risk” is defined by SFDR as an environmental, social or governance event or condition that, if it occurs, could cause a negative material impact on the value of the investment.

Top-Down Investment Process

Sustainability Risks and ESG factors are among the many drivers considered by FI’s Capital Markets Analysts and FI’s Investment Policy Committee (“IPC”) when developing country, sector and thematic preferences. Environmental regulation, social policy, economic and market reforms, labour, and human rights are among the ESG factors assessed when determining country and sector/industry allocations and shaping an initial prospect list of portfolio positions.

FI’s IPC, with the assistance of FI’s Securities and Capital Markets Analysts, determines the materiality of the ESG considerations based on the exposure among publicly-traded companies in these categories. Higher materiality could imply larger ESG-related risks or opportunities, and may influence sector and country weight preferences as well as individual stock selection. The investment strategy and positioning reflects FI’s outlook over a 12-18 month horizon.

Bottom-Up Investment Process

FI’s Securities Analysts perform fundamental research on prospective investments to identify securities with strategic attributes consistent with FI’s top-down views and competitive advantages relative to their defined peer group. The fundamental research process involves reviewing and evaluating a comprehensive set of qualitative and quantitative data, including ESG factors, prior to purchasing a security. Factors considered in portfolios include, but are not limited to: shareholder concentration, corporate stewardship, environmental opportunities & liabilities, and human or labour rights controversies. FI would choose not to invest in companies when, in its opinion, security level ESG issues: (i) violate a client mandated ESG policy, (ii) present an inordinate risk to a company’s operational or financial performance or (iii) appear to present undue headline risk to share price performance.

Given that FII outsources the portfolio management function to FI, it is not currently envisaged that the consideration of Sustainability Risks will be of primary relevance to the functions performed by FII staff. Accordingly, FII does not currently anticipate consideration of Sustainability Risks as being a significant factor in the assessment of FII’s staff members’ variable remuneration.

Notwithstanding that the consideration of Sustainability Risks is integrated into FI’s investment decision-making process, by virtue of FII’s size, FII is not required and currently elects not to consider the adverse impacts of its investment decisions on environmental, social or employee matters, respect for human rights, or anti-corruption or anti-bribery matters (“Sustainability Factors”) in respect of all portfolios it manages. However, with respect to strategies that promote environmental or social characteristics or have a sustainable investment objective (an “ESG Strategy”), the sustainability-related disclosures provided below for each ESG Strategy describes how principal adverse impacts on Sustainability Factors are considered by FI, including to what extent the indicators listed in Table 1 of Annex I of the Commission Delegated Regulation (EU) 2022/1288 (the “SFDR RTS”) are taken into consideration by FI. Furthermore, for institutional clients who have an ESG Strategy implemented in their investment portfolio, such institutional clients will receive pre-contractual disclosures related to their investment portfolio that will describe how principal adverse impacts on Sustainability Factors are considered by FI in their investment portfolio.

FII makes available to its institutional clients certain ESG Strategies that can be implemented in an institutional client’s investment portfolio. By implementing an ESG Strategy in an institutional client’s investment portfolio, such portfolio is considered an Article 8 or Article 9 financial product under SFDR, which requires certain portfolio-specific disclosures to be provided on FII’s website. However, FII considers the management of its institutional client’s investment portfolio to be confidential, and will not publish portfolio-specific sustainability disclosures on its website. Instead, FII publishes the below information about the ESG Strategies at the model level, which will include SFDR periodic reporting on the performance of such ESG Strategies from a sustainability perspective.

Reference Period: 1 January 2021 to, and including, 31 December 2021

The following investment strategies were implemented in one or more accounts during the Reference Period and were therefore eligible for periodic reporting:

  • Fisher Investments US Equity ESG (collectively, the “Strategies”)

Below is a description of the extent to which environmental and social characteristics were met in each of the Strategies during the Reference Period at the model portfolio level. As Fisher Investments Ireland treats the portfolios of all its clients as confidential, Fisher Investments Ireland does not provide copies of the actual SFDR required periodic reports delivered to clients on this website. As there may be divergences between a Strategy’s model portfolio and how it is implemented in a client’s investment portfolio (for example, due to client mandated restrictions, modifications to the strategy, tax sensitivities, etc.), clients who have implemented one of the Strategies in their investment portfolio should review the SFDR periodic reporting delivered directly to them as part of their portfolio’s performance reporting.

At the model portfolio level for each Strategy, during the Reference Period:

  • Fisher Investments considered ESG factors throughout the investment and portfolio construction process. ESG factors were among the many drivers considered by Fisher Investments when developing country (if applicable), sector and thematic preferences. Environmental regulation, social policy, economic and market reforms, labour, and human rights are among ESG factors considered when determining country (if applicable) and sector/industry allocations and shaping an initial prospect list of Strategy positions.
  • Fisher Investments performed fundamental research on prospective investments to identify securities with strategic attributes consistent with Fisher Investments’ top-down views and with competitive advantages relative to their defined peer group. The fundamental research process involves reviewing and evaluating a range of ESG factors prior to purchasing a security, seeking to identify securities benefitting from ESG trends and avoid those with underappreciated risks.
  • Fisher Investments narrowed the security selection universe by applying comprehensive and robust ESG screens ensuring that no company with the following characteristics were included in the Strategy. More specifically, screens applied to the Strategy over the Reference Period included, but were not limited to, screens meant to exclude securities issued by:
    • Companies with:
      • 5% or greater revenue from tobacco
      • 5% or greater revenue from gambling
      • 5% or greater revenue from alcohol
      • 5% or greater revenue from adult entertainment
      • 5% or greater revenue from genetically modified organisms
      • 5% or greater revenue from civilian firearms
      • 5% or greater revenue from conventional weapons
      • 30% or greater revenue from thermal coal production
      • 30% or greater power production from thermal coal
    • Companies with:
      • Any ties to cluster munitions
      • Any ties to landmines
      • Any ties to depleted uranium weapons production
      • Any revenue from nuclear weapons
      • Any revenue from bio-chemical weapons
    • Companies that:
      • Fail compliance with the U.N. Global Compact principles
      • Conduct animal testing for non-pharmaceutical purposes without meeting certain animal testing norms
      • Violate the International Labour Organization’s fundamental principles
      • Are embroiled in very severe environmental, social, governance or child labor controversies

During the Reference Period, these Strategies may have included investments in sustainable economic activities, however presently (as of 31 December 2021) we have not set a minimum proportion of each Strategy that must include investments that contribute to environmentally sustainable economic activities in accordance with the EU Regulation on the Establishment of a Framework to Facilitate Sustainable Investment (Regulation EU/2020/852) (the “Taxonomy Regulation”). An investment included in one of the aforementioned Strategies would be considered as environmentally sustainable where its economic activity (i) contributes significantly to one or more of the environmental objectives included in the Taxonomy Regulation (which includes (a) climate change mitigation, (b) climate change adaptation, (c) the sustainable use and protection of water and marine resources, (d) the transition to a circular economy, (e) pollution prevention and control and (f) the protection and restoration of biodiversity and ecosystems), (ii) does not significantly harm any of the environmental objectives included in the Taxonomy Regulation, (iii) is carried out in compliance with minimum safeguards (as prescribed in the Taxonomy Regulation) and (iv) complies with technical screening criteria established by the European Commission.

Therefore, for the purpose of the Taxonomy Regulation, it should be noted that during the Reference Period, these Strategies may not have included investments that take into account the EU criteria for environmentally sustainable economic activities and the “do no significant harm” principle applies only to those investments included in the Strategies that take into account the EU criteria for environmentally sustainable economic activities.

Should any changes be made to this disclosure in the future, a clear explanation of such changes will be published here.

Implemented Changes

In January 2022, this disclosure was updated to:

  • reflect the postponement of the SFDR RTS effective date to January 2023;
  • address SFDR and Taxonomy Regulation periodic reporting; and
  • modify the strategy line-up in the Sustainability-Related Disclosures section; and
  • adding disclosures regarding the Taxonomy Regulation.

 

In December 2022, this disclosure was updated to:

  • update the sustainability-related disclosures for the ESG Strategies to comply with the SFDR RTS;
  • remove the principal adverse impact statement that was originally posted to comply with SFDR on a high level, principles basis; and
  • remove disclosures not required under SFDR or the Taxonomy Regulation (Regulation EU/2020/852).

 

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Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.


Fisher Investments Ireland Limited, trading as Fisher Investments Europe, is authorised and regulated by the Central Bank of Ireland (CBI), and is wholly owned by Fisher Asset Management, LLC, trading as Fisher Investments (FI). Fisher Investments Europe delegates portfolio management to its parent company, FI.