SMART BETA – RETURN PATTERN ANALYSIS

This post is issued by Osmosis (Holdings) Limited, a London based investment management group. For more information, please contact Lisa Harrison on 07716 912832 or [email protected]

Executive Summary

The Osmosis MoRE World Smart Beta Fund1 seeks to generate returns based on Osmosis’
Model of Resource Efficiency (MoRE). Resource efficiency (RE) is measured at the company
level, using Osmosis’ proprietary environmental database, and focuses on the quantity of
water, carbon emissions, and waste created to produce each unit of revenue.
Stocks held within the Osmosis MoRE World Smart Beta Fund are weighted depending on
their measure of resource efficiency as calculated using Osmosis’ proprietary ‘RE’ factor. For
clarity, the portfolio maintains overweight positions in those companies which most efficiently
use limited resources and underweight positions in resource intensive companies.
The investment literature is awash with studies asking whether ‘environmentally friendly’ (or
‘green’) portfolios can be operated without incurring a financial penalty. The Fund has
consistently demonstrated positive returns relative to the MSCI World benchmark since its
launch in June 2017 (Figure 1); all this while significantly reducing the environmental footprint
of the investments held.

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Important Information

This document was prepared and issued by Osmosis Investment Research Solutions Limited (“OIRS”). OIRS is an affiliate of Osmosis Investment Management US LLC (regulated in the US by the SEC) and Osmosis Investment Management UK Limited (regulated in the UK by the FCA). OIRS and these affiliated companies are wholly owned by Osmosis (Holdings) Limited (“Osmosis”), a UK based financial services group. Osmosis has been operating its Model of Resource Efficiency since 2011.

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