abrdn Sustainable Asian Opportunities Active ETF (Managed Fund)

Our abrdn Sustainable Asian Opportunities Fund contains high-quality companies that have been identified through our bottom-up equity research process which takes into consideration the sustainability of the business in its broadest sense and the company’s environmental, social and governance (ESG) performance. Within our equity investment process, every company that we invest in is given, via a qualitative assessment, a proprietary overall Quality rating. A key component of this is the ESG Quality rating, which enables the portfolio managers to identify sustainable leaders and improvers and to build well diversified, risk-adjusted portfolios.

To complement our bottom-up research, the portfolio managers also use our proprietary ESG House Score, which is primarily a quantitative assessment, to identify and exclude those companies exposed to the highest ESG risks. Finally, binary exclusions are applied to exclude the particular areas of investment detailed below.

The Fund is managed under the abrdn Australian Sustainable Framework built on the framework abrdn group has developed under SFDR (the Sustainable Finance Disclosure Regulation) and therefore promotes Environmental & Social characteristics and investments that follow good governance practices. 

The Fund's investment objective is to provide investors with high capital growth over the medium to long term (3-5 years) by seeking exposure to the Asian markets (other than the Japan market), adjusted to take into account certain ESG (Environmental, Social and Governance) considerations. and performance is benchmarked against the MSCI All Countries Asia Accumulation Index (excl Japan) AUD unhedged).

The fund may be suitable for mainly direct and indirect investors seeking long term capital growth with some income through investment in Asian equity securities, while reducing exposure to the long term risks associated with ESG factors and companies which fail to meet recognised sustainability standards while seeking improvement in business practices / approach through targeted engagement. 

The Fund aims to generate high capital growth over the medium to long term by investing primarily in equities and equity-related securities of companies listed, incorporated or domiciled in Asia countries (excluding Japan) or companies that derive a significant proportion of their revenues or profits from Asia countries (excluding Japan) operations; or have significant proportion of their assets there.

The Fund is actively managed. The Fund aims to outperform the MSCI All Countries Asia Accumulation Index (ex Japan) (AUD Unhedged) benchmark before fees and costs The benchmark is also used as a reference point for portfolio construction and as a basis for setting risk constraints, but does not incorporate any sustainable criteria. In order to achieve its objective, the Fund will take positions whose weightings diverge from the benchmark and may invest in securities which are not included in the benchmark. The investments of the Fund may deviate significantly from the components of and their respective weightings in the benchmark. Due to the active and sustainable nature of the management process, the Fund’s performance profile may deviate  significantly from that of the benchmark.

The Fund utilises abrdn’s equity investment process, which enables portfolio managers to qualitatively identify and focus investment in sustainable leaders and improvers.

Sustainable leaders are viewed as companies with the best in class ESG credentials or products and services which address global environmental and societal challenges, whilst improvers are typically companies with  average governance, ESG management practices and disclosure with potential for improvement. Investment in all equity and equity-related securities will follow the Fund's 'Investment Approach'. The Fund looks to exclude at least the bottom 10% of companies with the lowest ESG House Score in the benchmark.

If investing in a company that is not in the benchmark, the company must have an ESG House Score that is equal to or higher than the minimum acceptable score within the benchmark. The Fund will also target a weighted average carbon intensity at least 20% lower than the benchmark for the Fund.

Additionally, abrdn apply a set of company exclusions which are related to the UN Global Compact, Weapons, Tobacco, Gambling, Thermal Coal, Oil & Gas and Electricity Generation.

Engagement with external company management teams is used to evaluate the ownership structures, governance and management quality of those companies in order to inform portfolio construction.

It is expected that the Investment Approach reduces the benchmark investable universe by a minimum of 20%, through a combination of in-house proprietary scoring tools and we use negative criteria to avoid investing in certain industries and activities that our customers are concerned with.

The Fund uses a number of ESG Assessment Criteria:

Identifying Sustainable Leaders and Improvers

We use our proprietary research framework to identify companies which we believe to be sustainable leaders or improvers.

Sustainable leaders are viewed as companies with the best in class ESG credentials or products and services which address global environmental and societal challenges, whilst improvers are typically companies with average governance, ESG management practices and disclosure with potential for improvement.

Within our equity investment process, for all companies under coverage we analyse the foundations of each business to ensure proper context for our investments. This includes the durability of its business model, the attractiveness of its industry, the strength of its financials and the sustainability of its economic moat. We also consider the quality of its management team and analyse the environmental, social and governance (ESG) opportunities and risks impacting the business and appraise how well these are managed. We assign a proprietary score (1 indicates best in class and 5 indicates laggard) to articulate the quality attributes of each company. The ESG Quality rating is an important consideration in assessing whether a stock is a sustainable leader or improver.

Companies eligible for inclusion in the Fund must be rated 3 or better on ESG Quality. 

Click here to view our fund flyer.

Click here to view our Sustainable Approach document.

Important Information:

Issued by abrdn Australia Limited ABN 59 002 123 364 AFSL No. 240263. This document has been prepared with care, is based on sources believed to be reliable and opinions expressed are honestly held as at the applicable date. However it is of a general nature only and we accept no liability for any errors or omissions. This is not an offer of securities. A Product Disclosure Statement (PDS), application form, and Target Market Determination (TMD) is available for each Fund by calling abrdn Australia Limited Client Services on 1800 636 888, at abrdn.com/au, or from your financial adviser. This document has been prepared without taking into account the particular objectives, financial situation or needs of any investor. Investments are subject to investment risk, including possible delays in payment and loss of income and principal invested. It is important that before deciding whether to acquire, hold or redeem an investment in a Fund that investors consider the Fund’s PDS, the Fund’s appropriateness to their own circumstances, objectives and financial situation and consult financial and tax advisers. Past performance is not a reliable indicator of future results. All dollars are Australian dollars unless otherwise specified. Indices are copyrighted by and proprietary to the issuer. MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis, should not be taken as an indication or guarantee of any future performance analysis forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI” Parties) expressly disclaims all warranties (including without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).