Janus Henderson is a signatory of the Principles for Responsible Investment, a set of voluntary and aspirational principles giving a framework for the integration of ESG issues into mainstream investment decision making and ownership practices.

Janus Henderson has applied firm-wide baseline exclusions for exposure to entities which currently manufacture, or which hold a minority shareholding of 20% or greater in an entity which manufactures:

·     Cluster munitions

·     Anti-personnel mines

·     Chemical weapons

·     Biological weapons

These firm-wide exclusions do not apply to index and other derivatives or passive portfolios (including Exchange Traded Funds) intended to track a benchmark.

The Responsible Entity has delegated investment decisions for the purposes of selecting, retaining or realising investments for the Fund to the Manager pursuant to the investment management agreement. Therefore the Responsible Entity does not itself take into account labour standards, environmental, social or ethical considerations for the purpose of selecting, retaining or realising investments for the Fund.

The Manager takes labour standards, environmental, social and ethical considerations into account when selecting, retaining or realising investments.

The Fund does not pursue a sustainability-related investment objective, nor will it be marketed as a sustainability related product. The Manager considers environmental, social and governance (“ESG”) issues but it is not bound by these considerations, unless they form part of firm-wide and fund-specific exclusions. ESG issues are one of many factors considered within the Fund’s investment process and are used alongside other measures in the investment process to improve the long term financial outcomes of the Fund’s portfolio.

Specifically, the Manager uses negative screens to exclude investment in issuers directly involved in the following activities:

• tobacco manufacturing, including alternative smoking products;

• manufacture of controversial weapons (such as cluster munitions, landmines, biological or chemical weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and/or non-detectable fragments); and

• production or distribution of pornography.

These negative screens may not be applied to indirect exposures through an issuer’s parent, subsidiary or related company.

The Manager will rely on ‘product involvement’ negative screening data, which identifies companies or issuers involvement in certain sectors or activities, provided by third party researchers to determine the individual issuers it should exclude. The exclusion will be based on a 0% threshold on revenue from the excluded activities. The way revenue is calculated will depend on the method used by the relevant third party researcher. While we have systems and controls in place to oversee and review information provided by third parties, omissions or errors from third parties may result in inadvertent exposure to otherwise excluded investments.

While the Manager applies these negative screens to exclude certain investments to the extent possible, the Fund may gain low levels of short term or de minimis indirect exposure to excluded investments as a result of indirect investment (including investment in underlying funds), index derivatives or interest in a subsidiary, parent or related company that is involved in the screened activities, which the Manager cannot sufficiently monitor or influence directly. The Manager seeks to take reasonable care to implement the Fund’s negative screens. If the Manager discovers an investment no longer meets the criteria, the Manager will seek to divest the holding subject to the prevailing market conditions and having regard to the best interest of investors.

Other than described above, the Manager has no predetermined view on the specific labour standards and environmental, social and ethical considerations which it will apply or a fixed methodology or weightings for taking these standards and considerations into account when selecting, retaining and realising investments of the Fund, but rather examines a range of labour standards and environmental, social and ethical considerations and uses a range of tools, methodologies and services to assist with decision making.

The Manager monitors and reviews ESG issues in respect of the Fund’s investments on a case by case basis and may take steps to realise, reduce or cease making further investments in organisations or securities which are negatively affected by ESG issues. The Manager has no set timeframe for monitoring and reviewing investments.

The Fund seeks to achieve a total return after fees that exceeds the total return of the Benchmark, by investing in a diversified portfolio of predominantly Australian income producing assets.