Category: Open Ended Investment Company
The Share Class is a share class of a Fund which aims to achieve a return on your investment, through a combination of capital growth and income on the Fund’s assets, which reflects the return of the MSCI World Diversified Multiple-Factor Index, the Fund’s benchmark index ("Index"). The Share Class also aims to reduce the impact of exchange rate fluctuations between the Fund's underlying portfolio currencies and Euro on your returns. The Share Class, via the Fund, invests in equity securities (e.g. shares) that, so far as possible and practicable, make up the Index, combined with foreign currency contracts for currency hedging. The Index aims to reflect the performance characteristics of a subset of equity securities (e.g. shares) within the MSCI World Index (“Parent Index”), which are selected and weighted on account of their relatively high aggregate exposure to four ‘style’ factors when compared to other securities within the Parent Index: Value (i.e. companies are rated based on their cheapness or expensiveness relative to other companies in the same sector); Momentum (i.e. companies are assigned a score based upon the share price performance in the previous months relative to other companies in the universe. Companies with better performance receive a better score); Size (i.e. companies are assigned a score based on their market capitalisation. Companies with lower market capitalisation receive a higher score); and Quality (i.e. companies are assigned a score based on the quality of their characteristics, such as profitability of the company, the stability of its earnings and low levels of leverage/debt). The constituents of the Index are selected from the Parent Index using the index providers risk model (the “Model”). The Model applies an optimisation process to the constituents of the Parent Index to select constituents so as to maximise exposure to the four ‘style’ factors while maintaining a total risk profile similar to that of the Parent Index. The optimisation process aims to weight constituents in the Index with a higher overall score representative of the exposures to the four ‘ style’ factors. The Parent Index represents large and mid capitalisation companies in developed countries which comply with MSCI’s size, liquidity and free-float criteria. Market capitalisation is the share price of the company multiplied by the number of shares issued. The Index rebalances on a quarterly basis to take into account the deletions from the Parent Index and, at alternate rebalances, the Model is applied to the Parent Index to update the Index (i.e. on a semi-annual basis). The Fund uses optimising techniques to achieve a similar return to its Index. These techniques may include the strategic selection of certain securities that make up the Index or other securities which provide similar performance to certain constituent securities. These may also include the use of financial derivative instruments (FDIs) (i.e.