Mayence Fair Value Bond Fund (fixed income fund) Absolute - - PowerPoint PPT Presentation

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SDG Evolution Flexibel (balanced fund) Mayence Fair Value Bond Fund (fixed income fund)

Absolute Return-Strategies with european focus Suitable for conservative investors

As at October 1st 2019

Only for professional investors. No delivery to private investors.

SUSTAINABLE INVESTMENTS WITH HIGH ESG-QUALITY AND POSITIVE SDG-IMPACT

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SUSTAINABLE INVESTMENTS WITH HIGH ESG-QUALITY AND POSITIVE SDG-IMPACT

ESG PORTFOLIO MANAGEMENT

Agenda

• Overview of Sustainable Investments
• Investment Process of ESG Portfolio Management GmbH
• Investment Solutions: Our Funds
• Summary
• Contact
• Attachments

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ESG & SDG

ESG – Environmental, Social, Governance SDG – Sustainable Development Goals 2015 introduced by UN as „Agenda 2030“. 193 countries promised to work for these 17 goals:

SUSTAINABLE INVESTMENTS WITH HIGH ESG-QUALITY AND POSITIVE SDG-IMPACT

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Sustainable Investments

Investments influence our environment and economy. Selecting issuers with high ESG qualities reduces the negative impact and the risk

• f investments.

Selecting corporations and countries with high positive SDG impact increases the portfolios‘ SDG impact. We expect - beginning 2019 - the regulatory requirement to report ESG qualities and CO2-emissions Constructing sustainable portfolios requires special research, compliance to standards and dedicated investment processes Certifications for sustainability such as UN PRI reporting and FNG-Siegel are gaining importance

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Source: Forum nachhaltige Geldanlagen FNG, Study 2019

ESG in Germany – Sustainable Investments Sustainable Strategies in Germany (in bn. Euro)

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ESG in Germany – Sustainable Investments Funds and Mandates (in bn. Euro)

Source: Forum nachhaltige Geldanlagen FNG, Study 2019

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Development of Sustainable Investments

2016 Introduction of SDG: 193 countries agree to 17 goals and 169 sub- goals 2012 Morgan Stanley starts the Investing with Impact Platform (IIP) 2010 Harvard starts Initiative for responsible investments (IRI) 2009 Bloomberg integrates significant sustainability news and ESG data 2006 Foundation of UN PRI (Principles for Responsible Investing Signatories‘ AuM: 4 tn. $ 2006 Impact-Investing is endorsed by Rockefeller- endowment 2001 Fondation: FNG Forum Nachhaltiger Geldanlagen e.V. 2000 Pension funds in Norway and U.S.A commit to sustainability 1986 Nuclear desaster in Tschernobyl 1898 Founding of Friends Fiduciary with sustainable investment guidelines 2018 Founding ESG Portfolio Management GmbH

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ESG Portfolio Management GmbH

Positive Impact Solutions towards the SDGs Strict Exclusion Criteria for selecting corporations and countries Focusing on Issuers with low CO2- emissions High ESG Qualities

• f all portfolio

positions Aiming for Performance also in difficult market environment using active risk management SUSTAINABLE INVESTMENTS WITH HIGH ESG-QUALITY AND POSITIVE SDG-IMPACT

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ESG Portfolio Management GmbH

SUSTAINABLE INVESTMENTS WITH HIGH ESG-QUALITY AND POSITIVE SDG-IMPACT

Positive Impact Solutions High ESG Qualities Strict Exclusion Criteria Low CO2-emissions Active Risk Management Majority in European corporations with high credit quality Selective investments in impact bonds Prudent portfolio construction Risk reduction with Put-options. SDG Evolution Flexibel Conservative balanced fund Equity weighting: average 30 percent Mayence Fair Value Bond Fonds Conservative fixed income fund Average credit rating min. BBB

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SDG Impact Measurement for SDG Evolution Flexibel

Source: MSCI ESG, October 2nd 2019, own calculations

39.9% 5.3% 7.0% 19.0% 5.0%

11 Source: http://www.xylem.com

Beispiel Impact Bond: 2,25% Xylem INC. 2023

very positive Impact for SDG 6

• Xylem INC. is a designer, manufacturer and service provider for water and wastewater applications
• The company addresses the full-cycle of water from collection, distribution and return to the environment
• In February 2019 Xylem INC. received an ESG Rating upgrade to AAA from MSCI ESG. The reasons have been

the further reduction of waste and the increasing focus on research and development of new products

Both funds of ESG Portfolio Management invested in this bond

12 Source: https://www.novonordisk.com/research-and-development.html

Example: Impact Equity: Novo Nordisk A/S

Very positive Impact for 2

• f the 17

SDGs

• Global pharmaceutical company with focus on Diabetes (Insulin supply)
• Novo Nordisk understands the SDGs as opportunities and uses them for orientation and implements

them in their business strategy and processes

• (https://www.novonordisk.com/sustainable-business/performance-on-tbl/more-about-how-we-work-and-

report/the-sustainable-development-goals.html)

The fund SDG Evolution Flexibel is invested in this equity

13 Source: https://www.nachhaltigkeit.nrw.de/fileadmin/download/nrw-nachhaltigkeitsstrategie_broschuere.pdf

Example: Green Bond: 1,1% NRW 2034

Very positive Impact for 6 of the 17 SDGs

• 15-year green bond of the state Nordrhein-Westfalen, volume EUR 2,25 bn.
• The sustainability strategy of NRW includes goals like social fairness, alternative energy, climate

protection and sustainable public transport

• Moody‘s Aa1, S&P AA-, Fitch AAA
• Issuance at March 6th 2019 at 99,835 (Swap + 10), price August 1st 2019: 112.40 (Swap - 3)

Boths funds of ESG Portfolio Management invested in this bond

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Example ESG Risks: Vale, January 25th 2019

Tailings dam collapse of the mining company Vale near the brazilian town of Brumadinho 300 persons died Pollution of surrounding water

Source: Der Spiegel, February 8th 2019

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Our ESG rating provider MSCI ESG assigned Vale a weak B rating even before the tailing dam collapse

As the minimum ESG rating of our investments is BBB, we did not own any Vale bonds or equity

Source: MSCI ESG, January 30th 2019

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The exclusions of our funds are extensive and strict:

We control our exclusions with ESG Screen 17 (www.screen17.com) Corporates are excluded when they operate in the areas: Weapon production Nuclear energy Coal or fracking Oil sands Companies are excluded when they generate more than five percent of sales in the areas: alcohol, gaming, pornography, oil, tobacco, gene technology or animal testing Countries are excluded when they are involved in Severe controversies, death penalty, conflicting human rights, corruption (source: Transparency International), or conflicting with non-proliferation treaty, authoritarian regime (source: Freedom House Ranking)

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Exclusions: Considering unwanted consequences

Example 1: Reduce carbon-emissions – Investments in utilities are not allowed Question: Do you use heating in a cold winter? Possible solution: Only invest in utilities with highest energy efficiency and best filter technology Example 2: No tobacco Question: What about supermarkets? Possible solution: No investment, if the company generates more than five percent of sales with tobacco

18 Source: MSCI ESG, October 2nd 2019

Extremely high ESG Quality of our funds and transparent reporting

• ESG Scores of 9,9 (Flexibel) and 10 (Mayence) are record results (Maximum:10)

MSCI ESG Fund Finder: position 25 and 27 out of 130.000 funds

• Flex receives 5 Morningstar Globes (highest sustainability assessment)
• 81% of our positions in Flexibel and 79% of our positions in Mayence are ESG

leader in their sectors (ESG Ratings AAA / AA)

• 15% of the positions in Flexibel and 17% in Mayence got an upgrade, whereas we

did not get any ESG downgrade in both funds‘ positions

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Lower Carbon Footprint and transparent Reporting

*the historic CO2-Values are linked to the current (funds and benchmarks) and are calculated backwards for every corporation

Development of the ESG quality, SDG impact and carbon emissions of the Flex Fund compared to the benchmark (iShares MSCI Europe ESG Screened UCITS ETF).

Source: MSCI ESG, October 2nd 2019

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Where does the performance come from?

Equities:

• Dividends
• Equity exposure x equity-portfolio-beta x equity

market movement

• Active management of equity allocation and equity

beta

• Alpha from title selection
• Fat tail risk management with equity puts

Performance sources of the SDG Evolution Flexibel

• Possible net equity range -10% bis 60% (average ca. 30 %)
• Bonds 65% and Cash/Gold (5%)

Bonds:

• Interest duration
• Managing interest duration and credit

beta

• Credit duration
• Carry and roll down
• Alpha from title selection

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base case (Equities+7%, Yields+0,5) best (E+10%, Y flat, Spreads -10Bp) worst (E-10%, Y-1, Spreads +20Bp) Equity exposure x equity-portfolio-beta x equity market development 2,3 3

• 3

Equity exposure x dividend yield (average: 2,5%) 0,75 0,75 0,75 Active Management of equity allocation and beta 0,5 0,5 Alpha from equity selection 0,5 1

• 0,3

Fat tail management with equity options

• 0,1
• 0,1

0,8 Interest duration (currently -2) 1

• 2

Active Management of interest duration and credit beta 0,5 1

• 0,5

Credit duration (currently 4) 0,26

• 0,52

Carry and roll down 0,33 0,33 0,33 Alpha from bond selection 0,5 1

• 0,3

Cash

• 0,03
• 0,03
• 0,03

Sum 6,3 7,7

• 4,8

Where does the performance come from? Scenario analysis

Historic performance is no indication for future performance

Source: own estimates and calculations

22 Source: Universal Investment, October 2nd 2019 Since July 2018 ESG Portfolio Management GmbH advises the fund

SDG Evolution Flexibel AK I

ISIN: WKN: Currrency: Volume: Total fund size: DE000A1W9AZ5 A1W9AZ EUR 10,765,964 EUR 17 Mio. EUR Cumulated performance (in %) 1 M 1 J 3 J 5 J Since inception KJ 2016 2017 2018 Fund

• 0,83
• 2.50

0.88

• 2.90

1.96 0.75

• 5.32

5.12

• 4.84

Fund p.a. 0.29

• 0.59

0.34 Monthly performance (in %) - ESG Portfolio Management GmbH advises since July 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2014

• 0.48

0.75 0.68

• 0.05
• 0.25

1.08 0.30

• 1.30

2.11

• 1.20

1.60 2015 3.23 2.58 0.63

• 0.49
• 0.38
• 2.49

1.52

• 4.97
• 1.13

4.00 1.90

• 1.86

2.19 2016

• 3.02
• 2.12

1.21

• 0.19
• 0.17
• 1.83

0.64 0.50

• 0.47
• 0.37
• 0.93

1.41

• 5.32

2017 0.16 1.13 1.51 0.85 0.28

• 1.33

0.34

• 0.72

2.96 0.84

• 0.62
• 0.32

5.12 2018 0.92

• 1.36
• 1.01

1.38

• 1.23
• 0.53

1.16

• 0.84
• 0.12
• 1.57

0.42

• 2.09
• 4.84

2019 1.78 1.65 0.44 1.17

• 1.07
• 1.13

0.03

• 1.22
• 0.83

0.75

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* since July 2nd 2018 ESG Portfolio Management GmbH advises the Skalis Evolution Flex On November 15th 2018, the fund paid a distribution of von 2,87 EUR per unit.

Source: Universal Investment, October 2nd 2019

24 Since February 2019 ESG Portfolio Management GmbH advises the fund

Mayence Fair Value Bond Fonds

ISIN: WKN: Currency: Total fund size: DE000A2AQZE9 A2AQZE EUR 21,537,841 EUR Cumulated performance (in %) 1 M 1 J 3 J 5 J Since inception KJ 2016 2017 2018 Fund

• 0.72
• 1.85
• 1.46

0.07

• 3.07

Fund p.a.

• 0.54

Monthly Returns (in %) - ESG Portfolio Management GmbH advises since February 2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD 2017

• 0.54

1.62

• 0.15

1.04

• 0.20
• 0.35
• 0.46

0.09 0.39 0.79

• 0.66

0.03 1.58 2018

• 0.55

0.07

• 0.66

0.61

• 0.41
• 1.75

1.31

• 0.56

0.81

• 0.68
• 0.73
• 0.52
• 3.07

2019 1.06 0.63

• 0.37

0.68 0.01

• 0.30

0.07

• 0.98
• 0,72

0.07 Source: Universal Investment, October 2nd 2019

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* On February 15th 2019 the fund distributed 1,75 EUR per unit since February 1st 2019 ESG Portfolio Management GmbH advises this fund

Source: Universal Investment, October 2nd 2019

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Risk Management

Actively using suitable instruments for risk management:

• Reduction of equity exposure with put options for relevant equity indices like

DAX or EuroStoxx and careful selection of portfolio weightings, strikes and maturities to remain cost efficient and to introduce a positive convexity to the portfolios

• In volatile market conditions we use tactical positions for the short term and

anticyclical positions for the longer term.

• Managing the interest duration using various instruments to avoid the „Bund

Future Squeeze Risk“

• Hedging FX exposures

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Fund data

Tranches SDG Evolution Flexibel AK I SDG Evolution Flexibel AK R SDG Evolution Flexibel AK S Mayence Fair Value Bond Fonds Share class Institutional Retail Seed

• WKN

A1W9AZ A1W9AA A1W9A0 A2AQZE ISIN DE000A1W9AZ5 DE000A1W9AA8 DE000A1W9A02 DE000A2AQZE9 Volume 10,765,964 EUR 276,622 EUR 5,866,787 EUR 21,537,841 EUR

• mind. order volume

From 100.000 EUR Unlimited From 10 mio EUR Ab 25.000 EUR Distribution Distributing Distributing Distributing Distributing Current benchmark No benchmark No benchmark No benchmark No benchmark Costs (As at May 2 nd 2019) Total costs* p.a. 1,14% 2,16% 0,69% 1,12% Advisor ESG Portfolio Management GmbH ESG Portfolio Management GmbH Investment Management Company Universal-Investment-Gesellschaft mbH Universal-Investment-Gesellschaft mbH Custodian State Street Bank International GmbH

• Joh. Berenberg, Gossler & Co. KG

*related to the last year and estimate for new funds

Source: Universal Investment, October 2nd 2019

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Summary

We offer investment solutions

• Positive impact towards the Sustainable Development Goals
• Positions in corporations and countries with high ESG quality
• Incorporating strict exclusion criteria
• Relatively low CO2-emissions
• Prudent portfolio construction using different performance drivers
• Active risk management to reduce losses
• Permanent and transparent reporting

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Managing Partner

• Successful Credit Analyst and Portfolio Manager since 1998
• Bankkaufmann Deutsche Bank Bremen, 1991-1993
• Diplomkaufmann Universität Trier, 1999
• Visiting Scholar New

York University, 2000

• Credit Analyst at Deutsche Bank, 1998 - 2000
• Credit Portfolio Manager at Deutsche Asset Management, 2000 - 2004
• Credit Hedge Fonds Manager at Credaris and Tripoint, 2004 - 2007
• Managing Director, Head Non-Financial Credit, Head ESG Credit,

Senior Multi Asset Manager at Deutsche Asset Management, 2007 - 2017

• Partner and Portfolio Manager nordIX AG, 2017 - 2018
• 2018: Founding ESG Portfolio Management GmbH
• Long term member of UN PRI Fixed Income Working Group
• Lecturer at Frankfurt University of Applied Sciences and DVFA
• Head DVFA Bond Commission and member of DVFA Sustainable Investing Commission
• Volunteer at CFA Institute

Christoph Klein CFA, CEFA

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Co-Portfolio Manager

• More than 20 years of professional equity experience
• Advised as equity analyst many fund managers regarding equity selection
• Head of the technology sector research team at Sal. Oppenheim
• Multiple winner as Germany‘s best telecom analyst
• Contributed to more than 40 capital market transactions
• Head of the audit committee at the supervisory board of the T

ecDax-company Drillisch AG, until October 2017

• Portfolio Manager of the fund Universal – AHP Aristoteles UI
• Managing Partner of AHP Capital Management

Frank Rothauge CFA

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Advisory Board

• Dr. Bob Buhr
• Founder and Direktor Green Planet

Consulting Ltd.

• Honorary Research Fellow at the Center for

Climate Finance and Investment at Imperial College Business School.

• previously Managing Director at Citigroup

und Director at Societe Generale

• Prof. Dr. Edward Altman
• Director of the Credit and Fixed Income Research

Programme at NYU Salomon Centers

• Professor for Finance at Stern School of Business

(NY University)

• Internationally famous expert for credit risk analysis
• In 2005 Dr. Altman was named by Treasury & Risk

Management as one of the 100 most influential financial experts

• Internationally known experts in the fields of credit analysis and asset management
• Valuable input and feedback
• Active support in portfolio management

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Our Partners

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We are active signatories of the UN PRI

1.

We will implement ESG in our decision making processes

2.

We will be active owners

3.

We will support transparency

4.

We will work to enhance the values in the financial industry

5.

We will cooperate to increase the effectiveness

6.

We will report about our activities and progress

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ESG Portfolio Management received a very positive assessment for its PRI report

Source: PRI 2019 https://www.esg-portfolio-management.com/wp-content/uploads/2019/07/2019-Assessment-Report- for-ESG-Portfolio-Management.pdf

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Contact

ESG Portfolio Management GmbH Christoph Klein, CFA, CEFA Hochstraße 29 60313 Frankfurt am Main Mail: klein@esg-pm.com Phone: +49 151 50408817 www.esg-portfolio-management.com

Source: MSCI ESG, October 2nd 2019

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Break MSCI SDG values down to the 17 SDGs Explanation Impact Measurement Method

For the SDG impact measurement of our funds, we have constructed our own measurement model based on the MSCI ESG Research Tool. Since MSCI ESG Inc. relates the impact measurement to 11 subject areas, the challenge was to meaningfully assign these 11 topics to the 17 SDG’s. This enables an impact measurement on the respective goals. The figures in the tables above reflect the estimated annual sales that companies achieve with products and services that offer sustainable impact solutions based on a $ 1 million investment in the portfolio or a hypothetical $ 1 million investment used to replicate the benchmark.

38 Source: MSCI ESG, October 2nd 2019, own calculations 1 No poverty 2 Zero hunger 3 Good health and well-being 4 Quality education 5 Gender equality 6 Clean water and sanitation 7 Sustainable energy 8 Decent work and economic growth 9 Industry, innovation and infrastructure 10 Reduce inequalities 11 Sustainable cities and communities 12 Sustainable consumption and production 13 Climate action 14 Life below water 15 Life on Land 16 Peace, justice and strong institutions 17 Partnerships for the goals in % 4617 0.7 33768 5.3 4270 0.7 1844 0.3 0.0 31617 5.0 119718 19.0 4491 0.7 3548 0.6 0.0 3548 0.6 44465 7.0 0.0 0.0 0.0 39.9% Flexibel as at September 30th 2019 MSCI ESG Area MSCI ESG Theme USD according to MSCI ESG SDG Basic Needs Nutrition 33,768 2 Affordable Real Estate 126 1 Major Desease Treatment 4,270 3 Sanitation 21,829 6 Empowerement Education 1,844 4 SME Finance 8,981 1, 8 Climate Change Alternative Energy 24,940 7 Energy Efficiency 94,778 7 Green Building 7,095 9, 11 Natural Capital Sustainable Water 9,788 6 Pollution Prevention 44,465 12 Sum (without Hylea) 251,884 39.9% 3 Faktor 631,288 100%

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SDG Impact Measurement for Mayence Fair Value Bond Fonds

30.5% 3.4% 8.5% 12.3% 4.1%

Source: MSCI ESG, October 2nd 2019, own calculations

40 Source: MSCI ESG, October 2nd 2019, own calculations 1 No poverty 2 Zero hunger 3 Good health and well-being 4 Quality education 5 Gender equality 6 Clean water and sanitation 7 Sustainable energy 8 Decent work and economic growth 9 Industry, innovation and infrastructure 10 Reduce inequalities 11 Sustainable cities and communities 12 Sustainable consumption and production 13 Climate action 14 Life below water 15 Life on Land 16 Peace, justice and strong institutions 17 Partnerships for the goals in % 2076 0.2 32668 3.4 3706 0.4 789 0.1 0.0 38823 4.1 116675 12.2 2075 0.2 6355 0.7 0.0 6355 0.7 81473 8.5 0.0 0.0 0.0 30.5% Mayence as at September 30th 2019 MSCI ESG Area MSCI ESG Theme USD according to SDG Basic Needs Nutrition 32,668 2 Affordable Real Estate 1 1 Major Desease Treatment 3,706 3 Sanitation 29,591 6 Empowerement Education 789 4 SME Finance 4,149 1, 8 Climate Change Alternative Energy 32,869 7 Energy Efficiency 83,806 7 Green Building 12,709 9, 11 Natural Capital Sustainable Water 9,232 6 Pollution Prevention 81,473 12 Sum (without Hylea) 290,993 30.5% 3 Factor 954,075 100%

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Lower Carbon Footprint and transparent Reporting

*the historic CO2-Values are linked to the current (funds and benchmarks) and are calculated backwards for every corporation

Development of the ESG quality, SDG impact and carbon emissions of the Mayence Fair Value Bonds Fonds compared to the benchmark (db x-trackers II ESG EUR Corporate Bond UCITS ETF).

Source: MSCI ESG, October 2nd 2019

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Important Information & Disclaimer This information is intended exclusively for professional customers or suitable counterparties as defined in the WpHG and is not intended for private customers. This advertisement does not constitute investment advice. No guarantee is given as to the accuracy and completeness of the information and any liability for any damage resulting from the use and / or disclosure of this information is rejected. The information is directed only at investors in the countries in which the respective fund is authorized for distribution. They are not intended for publication or use by persons or companies in a country in which the fund is not authorized for distribution. In particular, the units of the respective fund may not be offered for sale or sold within the USA nor to or for the account of US citizens or US persons resident in the USA. The documents published here and the information contained therein may not be distributed in the USA or in other countries in which distribution is not permitted. The fund portrait is for information purposes only and does not constitute investment advice or solicitation to buy or sell shares in the

• fund. The sole basis for the purchase of units is the sales documents (key investor information, sales prospectus, annual and semi-annual

reports) relating to the fund. Sales documents relating to all of the investment funds of Universal-Investment are available free of charge from your adviser / broker, the responsible depositary or Universal-Investment at http://www.universalinvestment.com. The fund has increased volatility due to its composition and investment policy, which means that unit prices may be subject to significant upward and downward fluctuations within a short period of time. Calculations or yield data are not to be understood as a yield commitment; they are purely indicative and based on data and assumptions that may possibly not be realized in practice, only in a different form or at different times. As a result, there is a risk that, in reality, lower returns or even losses, even total loss, will be achieved. Past performance is no indication of future performance. ESG Portfolio Management GmbH, headquartered in Frankfurt am Main, is an owner-managed company with core competence in bank- independent advice on capital market products. It develops tailor-made solutions for professional investors in order to generate sustainably adequate income despite rather low risk budgets. ESG Portfolio Management is initiator and advisor to the funds Skalis Evolution Flex and Mayence Fair Value Bond Fonds. The information may not be reproduced in extracts or as a whole without the written permission of the creator or passed on to other

• persons. ESG Portfolio Management GmbH is part of the investment brokerage of financial instruments and investment advice pursuant to
• Sec. § 1 KWG exclusively on account and under the liability of AHP Capital Management GmbH, Hochstraße 29, 60313 Frankfurt, active (§

2 para 10 KWG).