Sustainability

The Kahler & Kurz equity fund promotes environmental and social characteristics within the meaning of Article 8 of the Disclosure Regulation and pursues its own ESG strategy. ESG refers to the consideration of environmental, social and governance criteria. The aim is to achieve a long-term increase in value while taking these investment criteria into account.

Sustainability philosophy in the investment process

As part of the holistic analysis of companies, the investment process places a strong focus on aspects such as the longevity of the business model, competitiveness, growth prospects and the quality of the company's balance sheet.

In addition, particular attention is paid to good corporate governance and a credible corporate culture. The company management should act in the interests of its owners and stakeholder. The following questions may give you some insights into what we are looking for:

• Are incentive systems for senior management appropriate?
• Is the communication with stakeholders consistent, clear and transparent?
• Do corporate governance structures look convincing?
• What is management’s track record with respect to business ethics?
• Do compliance and risk management teams work together?

In addition, data and analyses from MSCI ESG Research are used for ESG assessments:

Systematic ESG screening and exclusion criteria

The fund advisor works with an ESG specialist, Advanced Sustainable Investment GmbH, in order to ensure compliance with sustainability criteria. The majority of investments are made in companies that, in addition to the aforementioned aspects of the investment process, have been selected taking sustainability criteria into account and have been analysed and positively assessed according to environmental and social criteria.

75% of the holdings in the fund need to have an ESG rating of at least BB according to the MSCI ESG Research methodology. The rating is based on environmental, social and governance criteria.

Furthermore, companies that violate the principles of the UN Global Compact are not investable. The United Nations Global Compact is the world's largest and most important initiative for responsible corporate governance and combines ten principles in the four categories of “human rights”, “labor standards”, “environmental protection” and “corruption prevention”.

In terms of exclusion criteria, the managers cannot invest in companies if their group sales have the following characteristics:

• Weapons: > 10%
• Banned weapons: > 0%
• Tobacco: > 5%
• Coal: >5%

In addition, the managers cannot invest in companies whose turnover amounts to

• more than 5% from the generation of nuclear energy (nuclear power) or
• more than 5% from oil sands/fracking or
• more than 5% from adult entertainment.

Furthermore, no bonds are acquired - as a liquidity substitute - from countries that are classified as “non-free” according to MSCI's Freedom House Index.