AB Sustainable Global Thematic Equities Fund

Overview

Objective

The AB Sustainable Global Thematic Equities Fund (“Fund”) aims to achieve returns in excess of the MSCI All Country World Index in Australian dollars, after fees, over the medium to long term. There is no guarantee that the Fund will achieve this objective or produce any positive returns.

Investment Strategy

The AB Sustainable Global Thematic Equities Fund is designed for equity investors with high-risk tolerances who want the potential for long-term growth of capital by investing in global equity securities in companies that may contribute to positive environmental and social outcomes.

The Fund invests in equities in both developed and emerging markets by applying the following investment process:

• First, the investment manager determines and reviews, on an annual basis, an investment universe of companies which generate approximately 25% or more of their revenue from the sale of products and services that we believe are consistent with themes that the investment manager has derived from the United Nations Sustainable Development Goals (UNSDGs). The key themes currently are (but which may vary over time) health, climate and empowerment. The investment manager uses these themes to assist in identifying companies which are expected to have potential for capital growth over time.
• Secondly, the investment manager excludes from the investment universe companies that it considers are misaligned with the UNSDGs. These currently include companies which are directly involved in the production, ownership or operation of the following products or services: Adult Entertainment; Alcohol; Cannabis (generally companies that derive more than 25% of their revenue from cannabis related activities); Coal (companies involved in the mining, distribution, refining, and transportation of thermal and metallurgical coal); Controversial Weapons; Firearms; Gambling; Genetically Modified Organisms (companies involved in the production of seeds and plants whose genome contains foreign DNA from another organism and are intended for agricultural use or human consumption); Military Contracting (companies that generate 5% or more of their revenues from selling weapon systems and/or essential, tailor-made weapon-related products or services to the military or defense industry. The exclusion does not apply to companies that provide non-weapons related products or services to the military or defense industry); Private Prisons; Tobacco ((e.g., the growing or processing of raw tobacco leaves), as well as tobacco products, or those that derive 5% or more of their revenue from the wholesale distribution of tobacco.).
  Companies which are distributors or retailers of these products or services but are not directly involved with the production or ownership or operation of these products or services will also be excluded if the distribution represents 20% or more of their revenue. For more information on the exclusions and any updates to the exclusions, see Section 5 of Additional Information.
• Thirdly, the investment manager conducts detailed company specific research to assess risk and returns, including an assessment of environmental, social and governance factors (see the Labour, Environmental, Social and Ethical standards section in the Product Disclosure Statement), to select and review on an ongoing basis, the Fund’s individual investments that it believes have compelling return potential.
• If, following an annual review, an individual investment ceases to be in the investment universe, the investment manager will reassess the attractiveness of the individual investment within the portfolio in determining whether to retain or sell the investment.

The Fund seeks to achieve its objectives by selecting at least 80% of its assets at the time of purchase from the investment universe determined by reference to the revenue and exclusion criteria noted above. The Fund may also hold cash and derivatives but these will not exceed 20% of the assets of the Fund.

The Fund does not usually hedge the foreign currency exposures of its equity securities to Australian dollars but the investment manager has the discretion to determine the extent to which any foreign currency exposure is increased, reduced or removed. For example, the Fund may hedge all or part of its currency exposure to Australian dollars or provide currency exposures greater than that provided by the underlying equity exposure.

The Fund may also invest in securities and financial products, including but not limited to common and preferred stocks (including American Depository Receipts and Global Depository Receipts), currency spot and forward contracts, stock index futures, stock options, ETFs, warrants, rights, initial public offerings and private placements, including new issues and secondary offerings, securities convertible into common stock, participation notes and Real Estate Investment Trusts (REITs).

Derivatives may be used to manage risk, invest cash and gain or reduce exposures. Derivatives will not be used for leverage or gearing purposes or to achieve a synthetic exposure to equities outside of the investment universe. “Revenue” means the revenue of any company as reported in its financial statements.

Meet the Team

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Pricing & Performance

Fund Literature