SELECTRA Best of SRI Funds

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2 50 PEOPLE FARAD International S.A. Insurance broker Target: B2B B4B2C EASI S.A. PSA (Professionnel du Secteur de l Assurance) B2B SERVICES FIA Asset Management S.A. PSF (Professional of the Financial Sector) Target: B2B B4B2C Management S.A. ManCo - UCITS and AIFM Manager 8 CORE MARKETS Belgium, France, Germany, Italy, Luxembourg, Switzerland, UK, Spain Target: B2B Target: B2B 2

3 FARAD Group and Sustainability: a business choice Founded in 2001 in Luxembourg, FARAD Group is unique for its approach which includes philanthropy, as well as a strong focus on business criteria on the daily activities and its overall business. In 2017, this process has led the Group to apply for the B-Corporation certification that ranks FARAD Group among the leading companies for its Environmental, Social and Corporate Governance (ESG) standards. At a global level, only 2000 companies benefit from the status of B-Corp. With this label by B-Lab, an international non-profit organization promoting the motto using business as a force for good, FARAD Group becomes the second B-Corporation in Luxembourg and a pioneer of and of Socially Responsible s (SRI) applied to the European financial and insurance sector. Over time, this approach has been reflected in the development of exclusive financial products such as the launch of European Impact Investing Platform SICAV-SIF (EIIP), the first AIFMD platform in the world, dedicated Impact Investing. 36 funds 12 in Sustainable Finance 500 Million AUM 1/2 of our assets invested in Sustainable Finance 3

4 Our Sustainability Timeline Creation of FIA Asset Management 2011: QUERCUS LAMARCKBIOTECH Creation of Management Promotion of Impact Invesing Creation of a Sustainability Team Launch of EIIP Launch of F&S Social Housing Fund - ASSESSMENT B-CORP - INIZIO LAVORI BEST OF SRI B-Corp certification Launch of funds Creation of FARAD International: sustainable approach devolving part of the profit in charity Partnerships in the launch of sustainable investment funds: Quercus Assets Selection and J.Lamarck Biotech 2014 Start of EIIP project Start of Best of SRI project Start of B-Corp assessment 2017 Creation of PHI Holding (FARAD Group) LuxFlag Membership 4

5 Composition of the European SRI market. PureSRI database internally-owned PureSRI database has been created with the final aim to map the european industry. PureSRI focuses on UCITS funds which respect to the following criteria: More than 300 funds More than 65 Billion AUM y apply one or more basic SRI strategies without limitation to exclusion y explicitly include other criteria than pure financial ones in their investment process In their legal documents or prospectus they describe how ESG criteria are integrated database, which collects around 300 pure, is composed as follows: Around 100 SRI bond funds, for a total EUR 20 Billion AUM Around 200 SRI equity funds, for a total EUR 40 Billion AUM 20 balanced and flexible funds, for a total of EUR 5 Billion AUM analyst team is in charge of the database s periodical update paying special attention to the respect of inclusion criteria 5

6 What are the average performances of? From the database analysis it is possible to identify the performances of European : How did the funds perform over a 3 years period? How did the funds perform on average over a 3 years period? 0.35 Benchmark Equities / / / /2016 6

7 What is? is proposed as an investment opportunity focused on SRI strategies available in the form of two UCITS vehicles: UCITS funds are based on PureSRI, a proprietary database gathering almost all the pure distributed in Europe. From PureSRI we developed several management strategies and selected our best: the quantitative algorithmic strategy. s uniqueness: 1st European Fund of investing 100% in pure SRI underlying assets UCITS daily liquidity Dedicated to institutional and retail investors We are present on Allfunds platform with both clases for institutionals and retail 7

8 process It is an algorithmic approach for the analysis of financial markets based on three pillars: creation of an internally-owned database, development of an internally-owned algorithm for the analysis, definition of different criteria for risk calculation. PureSRI database allows our investments team to map the market. It is daily updated by a dedicated team of three people. investments team defines algorithmic parameters along with the investment universe and the strategy to apply. Moreover, the team constantly develops its investment process thanks to new back tests and parameter adjustments. rules definition concerning risk control allows to contain portfolios draw-downs while monitoring the volatility. If necessary, portfolios are rebalanced. PureSRI Wide investment universe High degree of customization Flexibility Algorithmic parameters In-house defined Backtesting Continuous optimization Risk Management Volatility restrictions parameters Multi-level risk control 8

9 How did we develop our strategy? Quantitative parameters LAUNCH investment team s funds selection criteria are translated into an algorithm Aim: to backtest a systematic investment strategy Results analysis and strategy adjustments STRATEGY DEFINITION BACKTEST OPTIMIZATION & OFF SAMPLE Parameters are optimized and tested again PHASE 1 DEVELOPMENT LAUNCH 9

10 Risk Management Risk Management A further component in FIA A.M. strategy is the algorithm, exclusively dedicated to risk management and, in particular, portfolio volatility control. Whenever portfolio effective volatility exceeds the one observed in the market, the algorithm suggests a portfolio reallocation, where portfolio s main volatility contributor is automatically excluded. Example of intervention of the volatility control tool VOLPER (grey area): Selectra Best of SRI 10

11 investment method To implement among different possible scenarios and to select the best in terms of performance and risk. After having carefully analysed several alternatives, we have opted for the Algoritmica application, an automated portfolio management strategy based on an algorithm, developing two different solutions: A strategy investing 100% in bonds: Algoritmica SRI A mixed strategy that invests 50% of the portfolio in bond funds and the remaining 50% in equity funds, known as Algoritmica SRI Algoritmica strategy represents a remarkable result for FIA A.M. team, who has applied its expertise in funds selection to a special algorithm. process Creation of a wide database, developed in terms of type of asset, class and strategy Definition of quantitative parameters for the analysis of markets and assets Development of a special algorithm to build the portfolio and the management of the volatility (Volper) Optimisation of the parameters and back testing Analysis of the investment results and production period Periodic re-balancing of the portfolio according to the changes in the ranking of the Top Performers Risk management 11

12 terms project focuses on two Fund of SRI within the vehicle s Sicav. se products are offered to institutional investors who seek to invest responsibly while minimizing the risk. Subscription Period 17 th April 13th July 2017 Launch Date 14 ht July 2017 Details Custodian Bank Manager Management Audit Central Administrator KBL epb FIA Asset Management Management Deloitte Luxembourg EFA 12

13 objective: main objective of this Sub-Fund is to generate a capital appreciation over the medium to long term by investing its assets only in shares/units of UCITS and other UCIs (the Target ) that take in consideration Environmental, Social and Governance criteria (ESG) within their investment policy or portfolio management processes. Target have to implement one or more of the following methods within their investment strategies or investment processes: Exclusions ESG Integration Best in Class Norms-based Screening Engagement and Voting Sustainability med Impact Investing To achieve this investment objective, the Sub-Fund may invest up to 75% of its assets in Target which primarily invest in debt and debt-related instruments and up to 75% of its assets in Target which primarily invest in equity related investments. neutral allocation among the two asset classes will be around 50% and 50%. 13

14 : Performance ANNUALIZED SHARPE RATIO / / / /2016 gross performance Benchmark: SRI Index Benchmark 2: 50% Barclays 50% MSCI

15 : Volatility 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 12/ / /

16 Monthly return Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year % 2.29% 0.92% 1.75% 0.88% -0.83% 0.84% 9. 47% % 1.21% 0.53% 0.85% 0.30% -0.82% 3.87% 1.00% -0.01% 2.52% -1.52% 2.82% % % 1.34% 3.16% 2.40% -1.57% -3.81% -1.30% -2.73% -0.73% 2.05% 0.59% -1.64% 3. 28% % -2.15% 0.77% -0.39% 2.54% 1.31% 1.40% 1.34% -0.79% -1.46% 3.75% 1.14% 8. 84% SRI Index Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Year % 0.53% 1.65% 0.94% 0.77% -1.00% 1.04% 4. 86% % 2.42% 4.16% 1.44% -1.47% 1.22% 3.30% 1.25% 0.09% -0.34% 0.83% 2.52% 7. 99% % 4.79% 4.48% 2.10% -1.94% -1.50% 1.54% % 4.03% 2.38% 4.56% -4.29% 5. 20% % -0.60% -0.72% 1.55% 1.16% 3.25% -0.71% -0.19% 2.15% -5.28% 4.90% 1.22% 8. 20% 16

17 Asset Currency Weight AMUNDI CREDIT EURO ISR EUR 2,50% CANDRIAM BONDS SUSTAINABLE EURO EUR 2,50% CS (LUX) SUSTAINABLE BOND FUND EUR 5,00% ETICA OBBLIGAZIONARIO MISTO EUR 5,00% FEDERAL OBLIGATION MOYEN TERME EUR 2,50% INVESTIMENTI SOSTENIBILI CLASS EUR 2,50% MUZINICH BONDYIELD ESG FUND INSTITUTIONAL HEDGED EUR ACCUMULATION EUR 2,50% PARVEST SUSTAINABLE BOND EURO EUR 2,50% PETERCAM L BONDS EMERGING MARKETS SUSTAINABLE EUR 5,00% PETERCAM L BONDS GOVERNMENT SUSTAINABLE EUR 5,00% PIMCO GIS: SOCIALLY RESPONSIBLE EMERGING MKTS BOND FUND EUR 2,50% Robeco Euro Sustainable Credits EUR 2,50% SEB Green Bond Fund EUR 2,50% SSGA EURO SUSTAINABLE CORPORATE BD INDEX FD EUR 2,50% TRIODOS SUSTAINABLE BOND EUR 2,50% UBAM - SRI European Convertible Bond EUR 2,50% Total 50,00% Amundi Actions Euro ISR EUR 2,50% BNP Paribas L1 Smart Food EUR 5,00% CREDIT SUISSE FUND (LUX) GLOBAL RESPONSIBLE EQUITIES EUR 2,50% JSS SUSTAINABLE WATER FUND EUR 5,00% ROBECOSAM SMART ENERGY FUND EUR 2,50% ROBECOSAM SMART MATERIALS EUR 2,50% ROBECOSAM SUSTAINABLE GLOBAL EQUITIES EUR 2,50% PARVEST GREEN TIGERS EUR 2,50% ROBECO EMERGING OPPORTUNITIES EQUITIES EUR 7,50% Vontobel Fund Clean Technology EUR 5,00% Vontobel mtx Sust Asian Ldrs exjpn USD 7,50% Vontobel mtx Sust Emerg Mrkts Ldrs USD 5,00% Total Equities 50,00% Sustainability med 37.50% ESG STRATEGY ALLOCATION Exclusion 10.00% Best in Class 5.00% Portfolio example ESG Integration 45.00% Engagement & Voting 2.50% 17

18 ISIN code LU LU LU LU LU LU LU LU Share Class Class A1 Class A2 Class B1 Class B2 Class C1 Class C2 Class R1 Class R2 NAV currency EUR EUR EUR EUR EUR EUR EUR EUR Dividend policy Distribution Capitalisation Distribution Capitalisation Distribution Capitalisation Distribution Capitalisation Minimum initial subscription amount Minimum subsequent subscription amount Management Fee EUR 10,000, EUR 200, Up to 0,35% per annum EUR 10,000, EUR 200, Up to 0,35% per annum EUR , EUR Up to 0,50% per annum EUR , EUR Up to 0, 50% per annum EUR , EUR Up to 0,65% per annum EUR , EUR Up to 0,65% per annum 1 share = 1 EUR Up to 1,15% per annum 1 share = 1 EUR Up to 1,15% per annum Performance Fee 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM Redemption Fee Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription 0% 0% 0% 0% 18

19 objective: main objective of this Sub-Fund is to maintain the real value of the assets over the medium to long term by investing its assets only in shares/units of UCITS and other UCIs (the Target ) that take in consideration Environmental, Social and Governance criteria (ESG) within their investment policy or portfolio management processes. Target have to implement one or more of the following methods within their investment strategies or investment processes: Exclusions ESG Integration Best in Class Norms-based Screening Engagement and Voting Sustainability med Impact Investing To achieve this investment objective, the Sub-Fund will invest up to 100% of its Net Asset Value in target funds which primarily invest in debt and debt-related instruments. 19

20 : Performance 115 ANNUALIZED SHARPE RATIO 110 gross performance Benchmark: SRI Index Benchmark 2: 50% Barclays 50% MSCI / / / /

21 : Volatility 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 12/ / /

22 Monthly return Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year % 2.01% 0.41% -0.07% 0.01% -0.72% -0.18% 1. 84% % 1.18% 1.09% 0.51% -0.27% 0.70% 1.70% 0.30% 0.04% 0.48% -2.54% 1.15% 4. 41% % 0.60% 1.99% 0.80% -2.03% -2.57% 0.14% -1.26% -0.05% 1.38% 1.05% -2.67% % % 0.07% 0.04% 0.29% 1.83% 0.98% 1.09% 0.69% 0.17% -0.30% 1.39% 0.41% 6. 55% Bond SRI Index Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Year % 0.05% -0.12% 0.35% 0.33% -0.58% 0.40% % % 0.90% 1.76% 0.69% -0.49% 0.89% 1.90% 0.82% -0.17% -1.03% -1.14% 0.69% 3. 47% % 1.27% 1.15% 0.34% -2.21% -1.83% 1.10% -1.95% -0.06% 0.67% 1.51% -1.22% 0. 04% % 0.25% 0.46% 0.71% 0.89% 0.83% 0.54% 0.42% 0.78% -0.35% 1.05% 0.65% 7. 18% 22

23 Asset Currency Weight AMUNDI CREDIT EURO ISR EUR 5,00% CANDRIAM BONDS SUSTAINABLE EURO EUR 2,50% CS (LUX) SUSTAINABLE BOND FUND EUR 10,00% ETICA OBBLIGAZIONARIO MISTO EUR 7,50% FEDERAL OBLIGATION MOYEN TERME EUR 2,50% INVESTIMENTI SOSTENIBILI CLASS EUR 5,00% MUZINICH BONDYIELD ESG FUND INSTITUTIONAL HEDGED EUR ACCUMULATION EUR 2,50% PARVEST SUSTAINABLE BOND EURO EUR 7,50% PETERCAM L BONDS EMERGING MARKETS SUSTAINABLE EUR 10,00% PETERCAM L BONDS GOVERNMENT SUSTAINABLE EUR 10,00% PIMCO GIS: SOCIALLY RESPONSIBLE EMERGING MKTS BOND FUND EUR 10,00% Robeco Euro Sustainable Credits EUR 10,00% SEB Green Bond Fund EUR 5,00% SSGA EURO SUSTAINABLE CORPORATE BD INDEX FD EUR 5,00% TRIODOS SUSTAINABLE BOND EUR 5,00% UBAM - SRI European Convertible Bond EUR 2,50% ESG STRATEGY ALLOCATION Sustainabilit y med 30.00% Exclusion 20.00% Best in Class 10.00% Portfolio example Engagement & Voting 2.50% ESG Integration 37.50% portfolio composition is set by the algorithm which gradually overweights the funds that return the most consistent performance over time. If a Fund remains among the top performers, the algorithm will increase the weight of this fund by proposing an additional purchase of 2.5%. 23

24 ISIN code LU LU LU LU LU LU LU LU Share Class Class A1 Class A2 Class B1 Class B2 Class C1 Class C2 Class R1 Class R2 NAV currency EUR EUR EUR EUR EUR EUR EUR EUR Dividend policy Distribution Capitalisation Distribution Capitalisation Capitalisation Capitalisation Distribution Capitalisation Minimum initial subscription amount Minimum subsequent subscription amount EUR 10,000, EUR 200,000.00,- EUR 10,000, EUR 200,000.00,- EUR 5,000,000.- EUR 100, EUR 5,000,000.- EUR 100, EUR , EUR EUR , EUR share = 1 EUR 1 share = 1 EUR Management Fee Up to 0,25% per annum Up to 0,25% per annum Up to 0,40% per annum Up to 0,40% per annum Up to 0,60% per annum Up to 0,60% per annum Up to 0,90% per annum Up to 0,90% per annum Performance Fee 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM 15% HWM Redemption Fee Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription Up to 1% during the first twelve months after the related subscription 0% 0% 0% 0% 24

25 Manager FIA operates under Free Provision of Services regime in Italy, France, Belgium, Germany and United Kingdom. 2 millions of own capital 11 employees 50 as a Group Head Office: Luxembourg Representative Office: Milan Management team 1 Senior asset managers 3 Junior asset managers 1 analyst 3 operational staff Due Diligence and Risk Management teams Assets under responsibility: >900M >350M in advisory (as of July 2017) 25

26 Team management is entrusted to FIA Asset Management and to its many times awarded team of analysts and asset managers. Ingo Werner - Senior Portfolio Manager Ingo Werner has more than 20 years of experience in the banking sector and financial markets becoming a specialist of the asset management. Before joining FIA in 2009 he has worked in Switzerland, Luxembourg, Singapore and Hong Kong for UBS and Banca del Gottardo /BSI. Gianluca D Alessio - Portfolio Manager Graduated with honors in finance from University of Trento, he joined FIA in 2014 as Analyst & Portfolio Manager developing quantitative investment models and managing portfolios for both institutional and retail customers. He began his career as a Treasury Specialist & Forex Trader at Cassa Centrale Banca. Giuseppe Fazi - Quantitative Analyst Giuseppe holds a Master in Management with specialization in finance from ESCP - Europe Business School. He joined the FIA management team on March 2016 developing systematic management solutions and managing portfolios for both institutional and retail customers. 26

27 Contacts Marco Cipolla Founding Partner, Director Giorgia Rizzatti Vertovez Senior Business Development Manager Italia 9, Rue Schiller L-2519 Luxembourg Tel Mob Via dell Annunciata Milan Tel Mob Simone Esposito Business Development & Relationship Management 9, Rue Schiller L-2519 Luxembourg Tel Mob Federico Budassi Junior Business Developer 9, Rue Schiller L-2519 Luxembourg Tel This document has been prepared - for information purposes only - by Management part of FARAD Group, with the sole aim of presenting the s activity and the main characteristics of its products and services. Management and FARAD Group offer no warranties of any kind, for the correctness and completeness of the information provided. Management and FARAD Group expressly disclaim liability for any loss or damage, direct or indirect, foreseeable or unforeseeable, for use of information contained in the extract. In all cases, past performance does not guarantee any future performance. No information provided about the services or products is or should be interpreted as an offer to sell or a solicitation of an offer for the purchase of insurance products and/ or financial and/ or other instruments in any jurisdiction where such offer or solicitation is prohibited by law or in which the person making the offer is not accredited or authorized to make such offer or solicitation or for those who are not allowed by law to receive offers or solicitations. This document is protected by copyright and other forms of proprietary rights. As a consequence you may not reproduce, distribute, publish, modify, and create derivate works from this document.

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