SNAMResponsibleInvestmentPolicy

1.Introduction

Our mission is to maximize investment returns on client assets we manage by investing in listed companies. In order to fulfil our fiduciary duties as an asset management firm, we also acknowledge that as an institutional investor, it is our responsibility to act as one end of the investment chain. Below, our code of conduct (SNAM Responsible Investment Policy) both describes how we see our social responsibility as an institutional investor and sets forth a code of conduct we promise to abide by.

2.Our responsibilities as an investor

  • (1)Stewardship responsibilities
    Many of our clients and their ultimate beneficiaries whose assets we manage are stakeholders; connected to the investee companies as both final investors and as employees, consumers, and suppliers. This is why in order to fulfill our fiduciary duties to maximize returns for clients, our actions to enhance the value and promote sustainable growth of the investee companies must also contribute to sustainable development of society and the wider economy as a whole.
  • As an institutional investor we believe that we have a responsibility to take a strong interest not only in making profits but also in creating added value at the investee companies and the distribution process.
  • (2)Responsibilities as a market participant
    The capital markets are essential public utilities which enable efficient distribution of resources by providing liquidity and price discovery functionality. In order to function properly, these markets require a large number of participants to engage freely in investment activity. Therefore, as one of the professional market participants who benefits from the existence of such markets, we recognize that our investment activities should be commensurate to the sound development of capital markets.
  • As an institutional investor, when we trade company stocks on the public capital markets, we believe that we have a duty to act on investment decisions supported by independent evaluation of medium-to long-term enterprise and stock value.

3.Our expectations towards the investee companies

As a responsible investor, we deem it essential for the investee companies to fully utilize the capital gained through the capital markets and to pursue the value enhancement and sustainable growth. This means we ask the investee companies to contribute to their shareholders, society, and the sound development of the economic system as a whole.

In turn, we expect the investee companies to be aligned with this commitment and to have in place effectively functioning corporate governance procedures and frameworks. To this end, we expect the following items to be considered as management objectives:

  • -Generate long term profitability by creating added value in responding to societal demand.
  • -Distribute added value created appropriately through sensible employment and capital policies.
  • -Make sure that information is disclosed accurately and in a timely manner
  • -Act ethically as a member of society in a manner which is contributive to societal issues such as the environment.

4.Our Initiatives

  • (1)Provide clients with superior quality active management
    Our investment philosophy is based around the central tenet that all securities have an intrinsic value with which market price converges in the medium-to long-term. This means that the source of our excess returns comes from discrepancies between intrinsic value and market price. As an institutional investor, one of our social missions is to provide active asset management with awareness of our role as a responsible investor. We have been fully dedicated to and aligned with this mission since our firm was founded and continue to engage in active asset management with a focus on medium-to long-term intrinsic value of equities.
  • We are fully aware of the need for accurate ESG related information in making investments which both enhance the enterprise value and contribute to long-term sustainable growth of the investee companies. In order to properly derive the intrinsic value of a company, it is also vital that we accurately identify any potential risks, in addition to perform earnings forecasts.
  • In making active investment decisions based on a combination of this kind of financial and non-financial information, we align ourselves with the management objectives of the investee companies, enabling the actual act of investing itself to enhance corporate governance. Additionally, by trading of stocks in accordance with this kind of objective active investment valuation criteria, we also contribute to the price discovery and liquidity provision elements of the capital markets.
  • Part of our duty as an institutional investor is to foster sustainable growth at the investee companies by promoting the innovative spirit of entrepreneurship through high quality active investing. In doing so, we work to achieve the best returns for our clients and beneficiaries, as well as contribute to the sustainable development of society, the wider economy, and the capital markets.
  • (2)Engagement
    Our analysts and fund managers forge deep relationships with key people at companies in our portfolios and investment universe, allowing them to engage on a regular basis. The main purpose of this engagement is to build up an understanding of a company’s intrinsic value—our investment criteria—over a long-term timeframe, and identify the value add and distribution process at its source.
  • One of our main strengths is the experience we have amassed through engaging in dedicated long-term intrinsic value based active investing since our founding over 20 years ago. Our analysts and fund managers tap into this expansive pool of industry and investment expertise to engage with companies in our portfolios and investment universe, working constructively to sustainably grow their intrinsic value over the long term.
  • We believe that it’s important for the investee companies to achieve the goals they set out. That’s why we encourage management to stay aligned and on course. Where they noticeably straying from the path they should be taking we call for improvements to be made. One of the ways we do this is through the execution of voting rights. We determine how to vote on items as a result of careful consideration as to whether key elements of corporate governance such as the board, auditors, compensation system, internal control system, compliance, and investor relations function are performing to the high level we expect.
  • Because we want to make sure our engagement with companies reflects the expectations of our clients and beneficiaries as much as possible, we are committed to using real examples of how our actions are improving returns and enhancing the investee companies, and communicating these points through accessible reports.
  • (3)Promoting responsible investing
    It is our hope that the concepts central to our responsible investing will be disseminated across society and lead to even greater results. In order to realize this, we have formulated at a high level investment frameworks and processes fit for purpose to follow the action policies outlined in this document On top of this, we will promote responsible investing by developing a range of products to accurately capture the needs of a diverse group of investor types.
  • *For retail investors, we offer
    • ・Sompo Japan Green Open
    • ・Sompo Japan SRI Open
    • ・Sompo Japan Eco Open (Dividend Focus Type)
  • *For pension funds and institutional investors, we offer
    • ・Japan Value Equity Sustainable
    • ・Japan Value Equity Green
  • We will continue to fulfill our social responsibilities as an institutional investor by positively engaging in providing high quality active management products that respond to asset management needs and meet the expectations of our clients and beneficiaries.

Our Strength

  • Distinguished Features
  • Responsible Investing & Corporate Social Responsibility
  • Our Social Responsibility Investment
  • SNAM Responsible Investment Policy
  • Our Response to Japan’s Stewardship Code
  • Proxy Voting Guidelines
  • Awards (Mutual Funds)

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