This information fulfils the disclosure requirements under Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (SFDR) for Anarosa Asset Management AG (“Anarosa” or the "Firm") as a financial market participant within the meaning of the SFDR and articulates the Firm's approach to its consideration of sustainability risks in the context of the Firm's activities.
No consideration of principal adverse sustainability impacts
Anarosa Asset Management AG employs fewer than 500 people, and there is no requirement for the Firm to develop an independent consideration of adverse sustainability impacts. In accordance with Article 4(1)(b) SFDR, the Firm does not currently consider the principal adverse impacts of its investment decisions on sustainability factors.
Our investment approach focuses solely on financial materiality and risk-adjusted returns, without explicitly considering sustainability or ESG criteria. We have made this decision for several reasons:
Performance considerations: Some studies have shown that certain ESG-focused funds may underperform broader market indices over various time periods. This could potentially be due to sector biases, higher fees, or exclusion of high-performing companies that don't meet ESG criteria.
Data reliability: There are ongoing challenges with the quality, consistency, and comparability of ESG data and ratings across companies and industries. This makes it difficult to accurately assess the true sustainability impact of investments.
Lack of standardization: The absence of uniform global standards for sustainable finance creates challenges in defining and measuring sustainability in investment products.
Fiduciary duty: Our primary responsibility is to maximize risk-adjusted returns for our clients. At present, we believe this is best achieved by focusing on traditional financial metrics and risk management.
Greenwashing concerns: The rapid growth of sustainable finance has led to instances of 'greenwashing', where products may be marketed as sustainable without meeting rigorous criteria. We prefer to avoid potential reputational risks associated with such practices.
Regulatory uncertainty: The ever-changing nature of sustainable finance regulations creates potential compliance challenges and costs that we currently choose to avoid.
We continuously monitor developments in sustainable finance and may reassess our approach as the market matures and if clear evidence emerges of sustained outperformance by sustainable investment strategies.
The compensation policy of the Firm is neutral and does not create negative incentives with regards to sustainability risks.
Transparency of adverse sustainability impacts at financial product level
None of the financial products offered, promoted or managed by the Firm considers principal adverse impacts of investment decisions on sustainability factors, and the Firm refrains from the inclusion of sustainability considerations in the investment decision-making process or advisory process in relation to any such products offered, promoted or managed by the Firm for the above stated reasons.
Balzers, August 2024