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The MoRE methodology systematically excludes companies that don’t disclose environmental metrics as well as companies with poor Resource Efficiency Score as well as giving a higher weight to companies with a higher Resource Efficiency Score. This process is carried on an on-going basis as companies disclose new data throughout the year and is reflected in the monthly rebalances of the portfolio.
Osmosis continually advances the training of staff in the gathering and interpretation of corporate environmental data. The KPI is the alpha generated
We have added significant new companies to the database, which now totals over 700 companies, with environemtal data collected back to 2005. In addition we have undertkane to translate corporate reports from non english reporting corporates. In adddition we have commenced the collection of data from within the Merging markets. We have built a significant dataset which has allowed the the team to strengthen the efficacy of our resource effciency signal and consequentially allow us to measure the reltiave efficiency of 700 corporates accross 33 economic sectors, as to their value creation relative to their resource consumption
Osmosis investment approach is driven by the utilisation of environmental data. We operate a continuous process of research and analysis to enhance our alpha.
During the year, the portfolio management team has worked with the research team to isolate Resource Efficiency in a market neutral portfolio. The Osmosis MoRE World Resource Efficiency Fund – Sustainable Market Neutral takes long positions in global listed companies in developed markets that are demonstrably the most efficient in using energy and water inputs while producing the least waste, per unit of revenue generated. It takes short positions in the least efficient stocks – constructing a portfolio targeting both a financial and an environmental return.
We target excess return in the portfolios through the utilisation of environmental data - performance can be reviewed in the public domain.
Our performance and risk attribution can explain the impact of resource efficiency on the portfolio. When isolating atypical common factors, Osmosis can highlight the consistent nature of ‘unexplained’/’idiosyncratic’ returns that are being generated by the Resource Efficient portfolios. Resource Efficient companies are being consistently rewarded by the market above and beyond the more well-known factors when compared to their less efficient peers over a typical market cycle.
Please see website / alpha is derived solely from environmental data
We do not target carbon savings - they are derived from the investment process. Portfolios will have in excess of up to 50% to relevant benchmarks
We deliver custom reports on the portfolios which detail their sustainability credentials by foot printing the fund against benchmarks illustrating that the strategy has a lower draw on energy, water, and waste relative to the benchmark. This is a unique process to Osmosis and provides a true quantifiable measure of sustainability.
We target a company specific report on a quarterly basis which is provided both to clients and in the public domain.
In 2018, Osmosis provided its clients with various ad hoc analysis reports on the Resource Efficiency signal and its use within portfolio construction.