PRIME VALUES Growth (EUR)

This financial product promotes environmental or social characteristics and although it does not seek to make sustainable investments, it contains a minimum of 70% sustainable investments. Notwithstanding any other use of the term “sustainable” in this document or in the fund name, the term “sustainable investment” refers exclusively to the definition in Article 2 No. 17 of Regulation (EU) 2019/2088. The investments of this financial product (with the exception of those listed under “#2 Other investments” in the pre-contractual information on the financial products referred to in Article 8(1), (2) and (2a) of Regulation (EU) 2019/2088 and Article 6(1) of Regulation (EU) 2020/852) are geared towards environmental or social characteristics.

The selection of assets is based on a global approach that analyzes the contribution to environmental, social and corporate governance characteristics.

The ethics analysis forms the basis for the selection of any investment, regardless of whether it is a sustainable investment or whether ESG characteristics are being promoted. For this purpose, an ethics analysis is prepared for each investment, which forms the basis for the investment decision. Arete Ethik Invest AG’s internal ethics research team first prepares a valuation proposal. In a first step, each issuer is examined to determine whether any of the defined exclusion criteria are affected (negative screening). Companies are excluded if they essentially violate the principles of the UN Global Compact or generate significant sales in the areas of weapons production, nuclear power, embryonic stem cell research, tobacco, gambling, adult entertainment or alcohol. Countries are excluded from the investment universe if, among other things, their military possesses nuclear weapons, the death penalty is part of the legal system, they have inadequate human rights standards, they have an above-average exposure to corruption or they have not signed the UN Convention on Biodiversity. The next step is to analyze the issuer’s environmental and social standards with regard to the products and services offered and the company’s processes along the value chain.

The principles of good corporate governance are assessed both in terms of the transparency of corporate reporting and the issuer’s stated self-image. The analysis of good corporate governance practices is therefore part of the ethics analysis. Among other things, the ethics analysis examines and evaluates the existence of a corporate governance code. In the positive screening, the ethics analysis therefore assesses each potential investment from five ethical perspectives, which evaluate the product and process level of the company’s activities, the active protection of natural resources, the understanding of responsibility and the transparency of corporate reporting on the basis of 25 individual criteria. Each individual criterion is weighted according to the sector to which the company belongs and assigned a score. The evaluation proposal is then submitted to an independent ethics committee, which uses its specialist expertise to re-examine both the violation of the exclusion criteria and the individual points of the detailed analysis and adjusts them if necessary. If exclusion criteria are not violated or only violated to an extent that is not relevant for exclusion, the Ethics Committee can still exclude issuers if critical activities add up. If the Ethics Committee does not consider any exclusion criteria to have been violated and the detailed assessment has been completed, the points for the individual criteria are added together to produce the company’s overall ethical score. An overall score of between 0 and 100 points can be achieved for each company, whereby a minimum score of 50 points must be achieved in order to remain in the investment universe. The result of the process described is a documented ethics analysis of each issuer.

Securities that are included in the investment universe by the Ethics Committee are then checked for their suitability as sustainable investments in accordance with Art. 2 (17) SFDR , which means that investments that contribute to achieving the social or environmental objective are checked in a further step for compliance with strict minimum requirements on the basis of selected individual indicators of the ethics analysis. To this end, a governance, a social and an ecological indicator are calculated on the basis of the ethics analysis.

Governance indicator
Compliance with the principles of good corporate governance is assessed on the basis of 4 individual criteria of the ethics analysis: (1) profit orientation, (2) corporate governance, (3) management principles, (4) management systems/structure

Social indicator
Whether a company contributes to achieving the social objective is assessed on the basis of the following individual criteria of the ethics analysis: (1) stakeholder concept and social commitment, (2) customer benefit, (3) consumer protection, (4) meaning and legitimacy from a social perspective, (5) employees, (6) suppliers. A standardized social indicator is created from the above criteria. To be considered a socially sustainable investment within the meaning of the SFDR, at least half of the possible points must be achieved. The assessment of the social sustainability of countries is initially based on ISS ESG indicators. This indicator covers the structure of the political system, respect for human rights and the state of health, education and social systems.

Ecology indicator
Whether a company contributes to achieving the ecological goal is considered on the basis of the following individual criteria of the ethics analysis: (1) sense and legitimacy from an ecological perspective, (2) environmental policy, (3) operation, (4) value chain, (5) product, (6) innovation and proactivity. A standardized ecological indicator is created from the above criteria. To be considered an environmentally sustainable investment within the meaning of the SFDR, at least half of the possible points must be achieved. The assessment of the environmental sustainability of countries is based on ISS ESG indicators. This indicator covers the availability and use of a country’s natural resources on the one hand, and energy consumption and consumer habits on the other.

The investments of the financial product are geared towards environmental or social characteristics and other investments. The breakdown of the investments of the financial product comprises
(1) investments of the financial product that were made to achieve the advertised environmental or social characteristics and
(2) the other investments of the financial product that are neither geared towards environmental or social characteristics nor classified as sustainable investments or any investments for which no data is available. This financial product advertises ecological or social features, but does not aim to make sustainable investments.

The ecological and social characteristics of the fund and the application of good corporate governance practices in the invested companies are met in particular by excluding issuers with the involvement of an established data provider in the ESG area.
The basis for the ethics analysis is the issuer’s annual report with other reports, such as the environmental report and CSR report (Corporate Social Responsibility), as well as the comprehensive sustainability analysis by ISS ESG. Information on the company’s website and current press reports are also key elements for recognizing the communication culture.

When assessing issuers with regard to their environmental and social characteristics, we work together with MSCI ESG Research and, through the investment manager, with ISS ESG. These are leading global providers of sustainability information. The data providers deliver sustainability analyses and key figures at issuer, sector and country level.

With regard to the financial product, there may be minor restrictions on the methods or data sources in connection with the data (e.g. in the case of estimates due to limited disclosures by the relevant issuers). Gutmann KAG applies procedures that it uses to ensure due diligence in connection with the underlying assets, including internal and external controls.
With regard to the investment strategy, participation generally takes place as part of the investment process.

No index was determined as a reference value for the environmental or social characteristics advertised with the financial product.

This financial product advertises ecological or social features, but does not aim to make sustainable investments.

The investments of this financial product (with the exception of those listed under “#2 Other investments” in the pre-contractual information on the financial products referred to in Article 8(1), (2) and (2a) of Regulation (EU) 2019/2088 and Article 6(1) of Regulation (EU) 2020/852) are geared towards environmental or social characteristics.

This financial product invests in issuers with very good and good environmental, social and governance ratings. The assessment is based on an ethics analysis prepared by Arete Ethik Invest AG’s internal research department. In order to be investable, the analysis must be confirmed by an independent ethics committee. The analysis first determines whether and to what extent exclusion criteria are affected by an issuer. It also assesses the issuer’s environmental and social standards with regard to the products and services offered and the company’s processes along the value chain. The principles of good corporate governance are assessed with regard to the transparency of corporate reporting as well as the issuer’s stated self-image.

This product is actively managed. No reference value has been designated to achieve the environmental or social characteristics advertised with the financial product.

The selection of assets is based on a global approach that analyzes the contribution to environmental, social and corporate governance characteristics.

Ethics analysis as a basis
The ethics analysis forms the basis for the selection of any investment, regardless of whether it is a sustainable investment or whether ESG characteristics are being promoted.
An ethics analysis is prepared for each investment for this purpose, which forms the basis for the investment decision. Arete Ethik Invest AG’s internal ethics research team first prepares a valuation proposal.

The analysis process is as follows:

Exclusion criteria (“negative screening”)
In a first step, each issuer is checked to determine whether defined exclusion criteria are met (negative screening). Companies are excluded if they substantially violate the principles of the UN Global Compact or generate significant sales in the areas of weapons manufacturing, nuclear power, embryonic stem cell research, tobacco, gambling, adult entertainment or alcohol. Countries are excluded from the investment universe if, among other things, their military possesses nuclear weapons, the death penalty is part of the legal system, they have inadequate human rights standards, they have an above-average exposure to corruption or they have not signed the UN Convention on Biodiversity.

Positive screening
In the next step, the issuer’s environmental and social standards are analyzed with regard to the products and services offered and the company’s processes along the value chain. The principles of good corporate governance are assessed both in terms of the transparency of corporate reporting and the issuer’s stated self-image. The analysis of good corporate governance practices is therefore part of the ethics analysis. Among other things, the ethics analysis examines and evaluates the existence of a corporate governance code.
In the positive screening, the ethics analysis therefore assesses each potential investment from five ethical perspectives, which evaluate the product and process level of the company’s activities, the active protection of natural resources, the understanding of responsibility and the transparency of corporate reporting on the basis of 25 individual criteria. Each individual criterion is weighted according to the sector to which the company belongs and assigned a score.

Assessment by an independent ethics committee
The assessment proposal is then submitted to an independent ethics committee, which uses its specialist expertise to re-examine both the violation of the exclusion criteria and the individual points of the detailed analysis and adjusts them if necessary. If exclusion criteria are not affected or only affected to an extent that is not relevant for exclusion, the Ethics Committee can still exclude issuers if critical activities add up. If the Ethics Committee does not consider any exclusion criteria to have been violated and the detailed assessment has been completed, the points for the individual criteria are added together to produce the company’s overall ethical score. An overall score of between 0 and 100 points can be achieved for each company, whereby a minimum score of 50 points must be achieved in order to remain in the investment universe.

The result of the process described is a documented ethics analysis of each issuer.

Further assessment as sustainable investments
Securities that are included in the investment universe by the Ethics Committee are then checked for their suitability as sustainable investments in accordance with Art. 2 (17) SFDR, which means that investments that contribute to the achievement of the social or environmental objective are checked in a further step for compliance with strict minimum requirements on the basis of selected individual indicators of the ethics analysis.

To this end, a governance, a social and an ecological indicator are calculated on the basis of the ethics analysis.

Governance indicator
The analysis of good corporate governance practices is part of the ethics analysis. Among other things, the ethics analysis examines and evaluates the existence of a corporate governance code. Sustainable investments are also assessed separately in quantitative terms using a governance indicator, which is calculated from the individual criteria of the ethics analysis.

Compliance with the principles of good corporate governance is assessed on the basis of 4 individual criteria of the ethics analysis:
– Profit orientation
– Corporate governance
– Leadership principles
– Management systems/structure

A uniform governance indicator is calculated from the above criteria. If a company does not achieve at least half of the possible points here, it is classified as neither environmentally nor socially sustainable within the meaning of the SFDR, even if it achieves the required number of points in the environmental and/or social indicator.

Social and environmental indicator
In order to assess whether a company contributes to achieving the social or environmental goal, a social indicator and an environmental indicator are calculated on the basis of individual indicators from the ethics analysis approved by the Ethics Committee.

Social indicator
Whether a company contributes to achieving the social objective is assessed on the basis of the following individual criteria of the ethics analysis:
– Stakeholder concept and social commitment
– Customer benefit
– Consumer protection
– Meaning and legitimacy from a social perspective
– Employees
– Suppliers
A uniform social indicator is created from the above criteria. To be considered a socially sustainable investment within the meaning of the SFDR, at least half of the possible points must be achieved.

The assessment of the social sustainability of countries is initially based on ISS ESG indicators. On the one hand, this indicator covers the structure of the political system, respect for human rights and the state of health, education and social systems. In order to measure whether a country contributes to achieving the goal of “promoting social inclusion, social cohesion and labor relations”, three ISS ESG indicators are used in the second step, which firstly assess the social security system, inequality and poverty risk of a country’s population; secondly, the structure of labor law and working conditions as well as the equality of various social groups (women, people with disabilities, (ethnic) minorities). A joint sustainability score is created from these three indicators. Only those countries that are among the 25% of countries with the highest sustainability score are considered sustainable within the meaning of the SFDR.

Ecological indicator
Whether a company contributes to achieving the ecological goal is assessed on the basis of the following individual criteria of the ethical analysis:
– Sense and legitimacy from an ecological perspective
– Environmental policy
– Operation
– Value chain
– Product
– Innovation and proactivity
A uniform social indicator is created from the above criteria. To be considered an environmentally sustainable investment within the meaning of the SFDR, at least half of the possible points must be achieved.

The assessment of the environmental sustainability of countries is based on ISS ESG indicators. This indicator covers the availability and use of a country’s natural resources on the one hand, and energy consumption and consumer habits on the other. In order to measure whether a country contributes to achieving the ecological goal, an ISS ESG indicator is used in the second step, which assesses the proportion of state protected areas on the one hand and the presence of endangered species on the other. Only those countries that are among the 25% of countries with the highest biodiversity score are considered ecologically sustainable in the sense of the SFDR.

If the Ethics Committee rates a security as “unacceptable”, it is excluded from the investment universe, cannot be invested in and therefore cannot be a sustainable investment pursuant to Art. 2 (17) SFDR, even if the corresponding scores in the environmental and/or social indicator were achieved.

For a comprehensive description of the fund’s investment strategy, please refer to section II point 14 of the prospectus.

The investments of the financial product are geared towards environmental or social characteristics as well as other investments. The breakdown of the investments of the financial product includes

(1) Investments of the financial product that were made to achieve the advertised environmental or social characteristics and
(2) the other investments of the financial product that are neither focused on environmental or social characteristics nor classified as sustainable investments or any investments for which no data is available.

This financial product advertises ecological or social features, but does not aim to make sustainable investments.

The environmental and social characteristics of the fund and the application of good corporate governance practices in the invested companies are fulfilled in particular by excluding issuers and, if necessary, by using an established data provider in the ESG area.

The ecological and social investments are evaluated in particular by the Ethics Committee as well as monitored and assessed by the investment manager’s internal sustainability team.

The ethics analysis assesses each potential investment from five ethical perspectives, which evaluate the product and process level of the company’s activities, the active protection of natural resources, the understanding of responsibility and the transparency of corporate reporting on the basis of 25 individual criteria. Each individual criterion is weighted according to the sector to which the company belongs and assigned a score. In total, the score for the five ethical perspectives must be greater than 50 out of a maximum of 100 points in order to be eligible for investment.

The ethics analysis is based on the issuer’s annual report and other reports, such as the environmental report and CSR (corporate social responsibility) report, as well as ISS ESG’s comprehensive sustainability analysis. Information on the company’s website and current press reports are also key elements for recognizing the communication culture.

Data sources from the management company:
MSCI ESG Research uses data from various sources, including direct data from companies (e.g. sustainability reports, annual reports, regulatory documents and company websites) and indirect data from companies (e.g. data published by authorities, data from industry and trade associations and third-party financial data providers).

Where company data is not available, MSCI ESG Research may use a subset of the suggested estimated metrics from MSCI ESG Research datasets. These datasets are created based on proprietary methodologies and informed by data from companies, market and industry peers, media, non-governmental organizations, multi-lateral and other credible institutions.
MSCI ESG Research also uses derived data based on its own datasets, such as: MSCI Business Involvement Screening Research, MSCI ESG Ratings, MSCI ESG Metrics, MSCI Climate Solutions and MSCI ESG Controversies. Additional information on MSCI’s SFDR Adverse Impact Metrics Mapping is also available to clients via the MSCI Client Support Site.

MSCI ESG Research considers a broad spectrum of dimensions when defining quality: Completeness, comprehensiveness, timeliness, accuracy and traceability to the source (evidence).

The automated and manual quality checks performed by MSCI ESG Research address the key aspects of data consistency and data accuracy. The MSCI ESG Research model is based on query extracts from the internal database and indicates when predefined conditions are triggered in relation to changes in the score or when suspicious values are present. The data that does not meet the quality standards is subject to further review and correction.

Measures that MSCI ESG Research applies to the data that feeds into MSCI’s SFDR module include, for example, quality assurance through dual-vendor validation to validate data against alternative sources using Natural Language Processing (NLP) or AI-driven extraction; keyword scanning to detect/capture disclosures; change-based (outlier)/range-based quality assurance for all quantitative data to check for large deviations and anomalies; negative disclosure checks for qualitative data points; data validation and data entry constraints to ensure data consistency and completeness; and validation of measurement unit consistency.

The MSCI ESG Research Issuer Communication Portal allows issuers to provide feedback on the underlying data along with a link to a publicly available source. MSCI’s data teams assess the data provided by issuers prior to publication and perform quality checks.

The data processes at MSCI ESG Research are additive and include multiple layers of validation to detect anomalies.
Data sourcing is a combination of automated data extraction and manual data collection. Raw data is collected from around 300 public sources, comprising up to 2 million articles and 1 million company documents per year. To manage this volume, MSCI ESG Research uses AI-driven tools to identify whether relevant data is disclosed in specific company documents and provides a classification of news sources and press releases that contain relevant data.

The quality assurance process for the input data includes issuer or security specific raw data validation including sentiment, association, streaming and dual vendor validation. Wherever possible, we use a dual-vendor validation method where the same data is collected independently from different sources/analysts from the same or comparable sources. For derived data sourced from MSCI ESG Research proprietary datasets, the process includes context-specific validation, including single factors, simple transformations and forecasting models. For output data, including ratings and analytics, the process includes validation at issuer and security level.

To oversee data updates, various governance committees provide an additional layer of review for material changes to data or models. These governance committees are comprised of senior research and content experts from across the MSCI ESG Research organization.

MSCI ESG Research uses estimated data to a limited extent. For example, MSCI ESG Research uses estimated data in relation to greenhouse gas/CO2 emissions in cases where the issuer discloses limited or no data on carbon emissions.

Data sources on the part of the investment manager:
The investment manager’s research initially uses the issuers’ annual and sustainability reports as well as ESG profiles from the external data provider ISS ESG to evaluate the issuers. In the final evaluation, the detailed knowledge of the experts on the independent ethics committee is also incorporated into the assessment. To ensure data quality, only the latest official publications of the issuers are used. If certain information cannot be found in the aforementioned documents and cannot be accessed via the external data provider, an estimate based on third-party information may be made in individual cases.

The limitations with regard to methods and data are in particular those listed in the section “Data sources and processing” above.

In addition, the investment manager’s analysis method has been continuously adapted to changing requirements for more than 25 years and covers all relevant areas of the environmental, social and governance dimensions. The data used for the evaluation is always up-to-date and from verified sources. However, despite great care, it cannot be ruled out that data may not be available or may be older than two years in individual cases. In such cases, the principle of caution of the independent ethics committee of the investment manager applies, which evaluates issuers more cautiously and, in case of doubt, can exclude issuers from the investment universe due to a systematic lack of information.

Sustainability risks are integrated into the existing risk management system, taken into account accordingly with regard to the fund and form part of the fund’s risk assessment. Sustainability risks are events or conditions in the areas of environment, social and governance (“ESG”), the occurrence of which could have an actual or potential material negative impact on the value of the investment.

These sustainability risks are integrated into the fund’s risk assessment and, if necessary, incorporated accordingly into the respective processes and procedures and included in investment decisions, in particular by taking into account the expected impact of the transaction on the fund’s sustainability risk.

Sustainability risks are assessed and monitored by risk management independently of fund management, taking external data into account. Sustainability ratings (scores) from an established provider are used for this purpose. Based on the ESG data for individual securities and sub-funds, a weighted Gutmann sustainability score is calculated, the level of which is used to determine an ESG risk classification that is monitored on an ongoing basis.

The fundamental ESG evaluation is subject to a continuous improvement process. As the independent Ethics Committee exchanges information with the Ethics Research team on a monthly basis and evaluates new companies, new ideas, comparisons, controversies and solutions are generated on an ongoing basis. The research process is therefore reviewed and scrutinized on a monthly basis.

The issuers in which investments are made are monitored with regard to important matters, including strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance as part of the investment process, which is based on the investment objectives of the financial product. ESG issues such as sustainability-related controversies may also be addressed, for example in investor meetings with company representatives, if they appear relevant. Gutmann KAG’s participation policy can be found at the following link: https://www.gutmannfonds.at/assets/d06732e7‐9285‐458f‐9b78‐2df04d0d6bc0.

No index was determined as a reference value for the environmental or social characteristics advertised with the financial product.