Fund Complex: Nationwide
Management Company: (1) Nationwide Fund Advisors; sub-adviser: Wellington Management Company LLP, (2) Sub-adviser: UBS Asset Management (Americas) Inc.; (3) (4) Sub-adviser: Vident Investment Advisory, LLC
Funds Affected: (1) Nationwide Fund, (2) Nationwide Global Sustainable Equity Fund (formerly, Nationwide Global Equity Fund), (3) Nationwide Maximum Diversification Emerging Markets Core Equity ETF, (4) Nationwide Maximum Diversification U.S. Core Equity ETF
Sustainable Investing Strategy: (1) ESG Integration, (2) Exclusions and ESG Integration, (3) (4) Exclusions
(1) The sub-adviser employs a “bottom-up” approach to selecting securities, emphasizing those that it believes to represent above-average potential for total return, based on fundamental research and analysis. Fundamental analysis of a company typically involves the assessment of a variety of factors, and may include the company’s business environment, management quality, balance sheet, income statement, anticipated earnings, revenues and dividends, and environmental, social and/or governance (ESG) factors.
(2) The sub-adviser employs both a positive and negative screening process with regard to securities selection for the Fund. The negative screening process excludes securities with more than 5% of sales in alcohol, tobacco, defense, nuclear, genetically modified organisms (GMOs), water bottles, gambling and pornography from the Fund’s portfolio. The positive screening process identifies securities of companies that appear to be fundamentally attractive with superior valuation characteristics. In addition, the positive screening process also includes material, fundamental sustainability factors that the sub-adviser believes confirm the fundamental investment case and can enhance the sub-adviser’s ability to make good investment decisions. These sustainability factors are material extra-financial factors that evaluate the environmental, social and governance performance of companies that, along with more traditional financial analytics, seek to identify companies that the sub-adviser believes will provide sustained, long-term value.
(3) (4) Companies are screened against a socially responsible investment (“SRI”) exclusion blacklist. The SRI exclusion blacklist contains those companies whose activities do not meet the criteria for socially responsible investing, such as the production or sale of unconventional weapons, production of tobacco, production of coal or coal-based energy, serious or systematic human rights violations, severe environmental damage, gross corruption, or other particularly serious violation of ethical norms. Companies included on the SRI exclusion blacklist are eliminated from consideration as eligible companies.