Change of Exclusionary Screens for the Australian Fixed Interest Component

Pendal Sustainable Balanced Fund – Class G (APIR: PDL4756AU, ARSN: 637 429 237)
Pendal Sustainable Balanced Fund – Class R (APIR: BTA0122AU, ARSN: 637 429 237)
Pendal Sustainable Balanced Fund – Class Z (APIR: PDL0478AU, ARSN: 637 429 237)
Pendal Sustainable Conservative Fund (APIR: RFA0811AU, ARSN: 090 651 924)

(the ‘Funds’).

Effective 8 June 2023, some of the exclusionary screens for the Funds’ Australian fixed interest component will be changing. Broadly, the changes apply:

1. stricter screening definitions for fossil fuels by limiting the Funds’ exposure to issuers specifically involved in the exploration, extraction or refinement of coal, oil and gas; and
2. stricter gross revenue thresholds by reducing the gross revenue threshold from 10% to 5% for issuers involved in the following business activities:
   • Alcohol
   • Gaming Facilities
   • Non-controversial Weapons
   • Pornography
   • Uranium
   • Fossil Fuels.

Why are we making the changes?

The changes ensure that the Funds remain true to label and are more closely aligned with investor expectations in relation to responsible investment funds where the market is moving towards stricter exclusionary screens.

What will stay the same?

Importantly, the stricter exclusionary screens do not impact the way in which we manage the Funds. 

The Funds’ investment return objective remains unchanged.

Additionally, there is no change to the Funds’ management fee.

Funds’ exclusionary screens – Australian Fixed Interest

Effective 8 June 2023, the exclusionary screens for each Fund will be as follows:

The Fund’s Australian fixed interest investments will not invest in issuers directly involved in either of the following activities:

• tobacco production (including e-cigarettes and inhalers); or
• controversial weapons manufacture (including cluster munitions, landmines, biological or chemical weapons, nuclear weapons, depleted uranium weapons, blinding laser weapons, incendiary weapons, and/or non-detectable fragments).

The Fund’s Australian fixed interest investments will also not invest in issuers directly involved in any of the following activities, where such activities account for 5% or more of an issuer’s gross revenue:

• exploration, extraction or refinement of fossil fuels (specifically coal, oil and gas); or
• the production of alcohol; or
• manufacture or provision of gaming facilities; or
• manufacture of non-controversial weapons or armaments; or
• manufacture or distribution of pornography; or
• direct mining of uranium for the purpose of weapons manufacturing.

What do you need to do?

No action is required. You will be able to continue to invest and withdraw from the Funds.

Updated Product Disclosure Statement (PDS)

An updated PDS for each Fund issued on 8 June 2023 along with our contact details should you have any questions is now available on www.pendalgroup.com.