FUNDX Investment Group

    139

    Funds Group: FundX Investment Group

    Management Company: FundX Investment Group

    Funds Affected: FundX Sustainable Impact Fund

    Principal Sustainable Investment Management Strategy*: Thematic Investing, ESG Integration, Exclusions, Shareholder Advocacy, Proxy Voting 

    Summary:

    This fund-of-funds invests in mutual funds and ETFs that self-identify as socially responsible impact funds or environmental, social and governance funds and funds with portfolios that have an above-average ESG Rating.

    Sustainable impact investing incorporates non-financial performance indicators that measure a company’s management of risks associated with environmental sustainability, social concerns, ethical considerations and corporate governance (ESG Factors) in an effort to generate long-term competitive investment performance and positive societal impact. These ESG factors include, but are not limited to:

    • climate change
    • working conditions, wage policies
    • executive pay
    • carbon footprint
    • corporate diversity policies
    • accountability
    • resource exploitation
    • racial and gender diversification
    • bribery and corruption
    • pollution and waste
    • human rights and child labor policies
    • political lobbying and donations
    • deforestation
    • employee relations
    • board diversity and structure
    • water usage
    • effect on local communities
    • tax strategies
    • renewable energy
    • health and safety
    • conservation

    A number of independent third-party enterprises endeavor to measure corporate performance with respect to ESG Factors by analyzing company policies, activities and practices. The fund will employ data and research provided by independent third-party enterprises that use company level research to assess the portfolios of the underlying funds and provide a fund level ESG rating.

    Funds that meet one of the two selection criteria described above, are further considered for investment in the portfolio of the fund based on the Advisor’s internal upgrading process. The Advisor applies a performance-and risk-based ranking system (FundX Rank) to underlying funds and selects investments for the fund based on these rankings. Invested funds that fall below a minimum FundX Rank as determined by the Advisor or fail to maintain an above-average ESG Rating are sold and replaced with other highly ranked funds.

    *Based on one or more of the underlying funds held in FundX Sustainable Impact Fund as of September 30, 2017.