Pharus Sicav Best Regulated Companies

Class QD (Listed)
ISIN: LU1868872802
Category: Other Equity
16.02.2024
Key Information
Net Asset Value78,14 EUR
Fund Size51.770.363 EUR
Launch Date 4 lug 2019
Key Information
Management information
SicavPHARUS SICAV
Management CompanyPHARUS MANAGEMENT LUX SA
Investment ManagerPharus Asset Management SA
Key Information
Investment objective
The Fund invests in companies specialized in infrastructures within the regulated sectors such as electricity transmission and distribution, water and gas transport, gas storage and re-gasification. They are infrastructural networks that offer services of strategic and social relevance for the Countries, which for this reason often operate in a monopoly regime, as they are remunerated by guaranteed returns based on criteria defined ex ante. The objective of the fund is to increase capital in the medium-long term. This is done by investing in a sector with low correlation to the economic cycle, focusing on companies with very stable earnings growth and high cash flows that translate into solid and sustainable dividend yields over time.
The Sub-Fund also enjoys the highest rating in the ESG rating scale available.
Key Information

Risk & reward profile

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16.02.2024
Manager comment
Manager comment
During the month of January, Pharus Best Regulated Companies recorded a negative performance of -3.53%, underperforming the global equity indices that close the month at +1.23%, a trend identical to the 2023 performance that saw the U.S. utilities sector as the worst performer within the market. The weakness in prices is not justified by corporate fundamentals, which record, in line with history, earnings and dividend growth of 5-6% and a return on equity for the sector at 11%, also a perfect historical average. Estimates of earnings growth, too, have even been revised upward, not downward, in both the past month and twelve months. The sector continues to be treated by investors in the same way as a bond and is experiencing a violent valuation de-rating driven by the sharp rise in interest rates, on which investors are waiting for more visibility from central banks about the imminent path of re-entry. Interestingly, the exact same dynamics of solid fundamentals and depressed prices due to the rate environment are shared by all defensive sectors.
That the value is in the utilities sector is seen, for example, by the valuation multiple differentials between the sector and the market, which is now at a discount near the highs of the past 10 years, with utilities being one of the very few sectors in the market trading at a valuation multiple lower than its 5-and 10-year average. On the currency front, we continue to maintain full hedging against currency risk.
Documents
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Last updated on 16.02.2024

*Performance is shown with gross income reinvested, based on net asset value and does not include the effect of any initial or exit charges.
* No coverage or derivatives are included
* No coverage or derivatives are included
Top Ten Holding
Xau Utilities Mar24 15.87 %
Nextera Energy Inc 7.82 %
Duke Energy Corp 5.08 %
Southern Co/the 4.36 %
American Electric Power 4.34 %
Terna Spa 4.04 %
Fortis Inc 3.92 %
National Grid Plc 3.72 %
Enel Spa 3.53 %
Alliant Energy Corp 3.09 %
Top Ten Holding
How to invest
SFDR Article: 8

SFDR Article: 8

The Sub-Fund does not have as its objective a sustainable investment, but promotes social characteristics with a proportion of sustainable investments with a social objective and environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy of at least 80% of its assets.

Objectives

The Sub-Fund’s sustainable investment objective is to protect the planet’s natural resources and climate for future generations, investing in companies with limited revenues coming from business with high carbon emissions, water stress, impact on the climate, toxic emissions and waste, in favor of companies offering and developing renewable energies. Moreover, it promotes, just and inclusive principles, evidencing a strong Sustainability rating and following good governance practices, while avoids the exposure to companies involved in controversial weapons production, tobacco production, adult entertainment, gambling sector, violation of United Nation Global Pact, as per the internal ESG policy defined.

The environmental characteristics promoted by the sub-fund are linked to:

  • Reduction of the environmental impact in the production phases
  • Attention on the consumption of natural resources
  • Development and diffusion of environmentally friendly technologies.

Social characteristics promoted are mainly represented by the below:

  • Security of products and health
  • Human rights and human dignity
  • Equality labour conditions
  • Governance
The environmental characteristics promoted by the sub-fund are linked to:

The environmental characteristics promoted by the sub-fund are linked to:

  • Reduction of the environmental impact in the production phases
  • Attention on the consumption of natural resources
  • Development and diffusion of environmentally friendly technologies.
Social characteristics promoted are mainly represented by the below:

Social characteristics promoted are mainly represented by the below:

  • Security of products and health
  • Human rights and human dignity
  • Equality labour conditions
  • Governance
As of 22.01.2024
As of
1
Enviroment
2
Security of products and health
3
Human rights and human dignity
4
Equality labor conditions
5
Governance

Asset Allocation

All the investments are assessed ex ante by an independent external ESG advisor and need to be compliant with including criteria and not in breach with excluding criteria set out on the applicable ESG policy. Investments aligned with E/S characteristic must attain the social and environmental characteristics promoted by the financial product and must represent at least 80% of the Sub-fund’s asset. Sustainable investments are investments in securities whose rating is considered acceptable and which comply with the excluding criteria set out in the ESG policy applicable. Other Investments include cash, derivatives, bonds and equities which do not have any ESG rating or with a weak ESG rating and can represent up to 20% of the portfolio.

Asset Allocation

Principal adverse impacts

This financial product considers PAI and monitors additional PAI with the support of an ESG Advisor that produces, on quarterly basis, a complete report that illustrates the PAI and the results for the portfolio. Furthermore, the Sub-Fund focuses on the PAI number 10 and 11. PAI number 10 monitors/takes into consideration weight of company with severe violation of UNGC principles or OECD guidelines for multinationals. PAI number 11 refers to weight of companies without mechanism for monitoring the compliance with UNGC principles and OECD guidelines.

Binding elements

The exclusion criteria applied to the investment universe, are aimed to exclude companies

Involved in controversial weapons production whose revenues deriving from the production of nuclear, biological and chemical weapons are higher than 5%
Whose revenues deriving from gambling sector is higher than 5%;
Whose revenues deriving from the tobacco production is higher than 5%;
Whose revenues deriving from adult entertainment sector is higher than 5%;
Which do not respect the principles of United Nation Global Pact.

The inclusion criteria is made up by 60% of scoring weight related to environmental factors, the other 40% is about Social and Governance factors including such companies:

Whose revenues deriving from toxic emissions are below 5%
Whose revenues linked to carbon emission are below 5%
Whose revenues deriving from water stress are below 5%
With revenues deriving from renewable energy
Limiting their impact on the climate
Treatment of emplyees
Product safety
Business ethics

In addition to the above, another binding element is the use of ESG ratings. The certified portfolio average ESG Quality score is A with a portfolio ESG Rating of 7.68, which cannot fall below B.
ESG Rating
Portfolio Scores
22.01.2024
A
ESG Quality Score
7.68