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Portfolio Solutions Group

How We Monitor External Managers 

 

Philosophy and Policy 
The Portfolio Solutions Group at Amova Asset Management is responsible for evaluating, selecting, and monitoring external managers. We believe that environmental, social, and governance (ESG) factors are essential to long-term corporate value and sustainable economic growth. ESG integration helps us manage investment risk, enhance long-term returns, support communities, and act as responsible stewards of the environment. 

Most of our external managers have signed letters of intent affirming their commitment to ESG integration. They are expected to assess and monitor ESG-related investments. Our team conducts regular reviews to ensure ESG is embedded in their investment processes and encourages improvements where needed. ESG considerations are central to our manager selection, including assessments of their companies, personnel, research, and investment practices. 

 

ESG Oversight and Collaboration 
We operate an inter-regional ESG Working Group, with members from our Tokyo, Singapore, and New York offices. This group researches evolving ESG trends and updates our ESG evaluation framework to reflect industry developments. These insights inform our assessments and discussions with external managers to ensure effective ESG integration. 

 

Framework Updates 
As ESG attention grows—particularly around climate change—we recognize the urgency of transitioning to net-zero emissions. In 2024, we updated our ESG Evaluation Framework and Due Diligence Questionnaire to better assess how managers support this transition. These tools are reviewed regularly to enhance our evaluation process. 

 

Engagement and Voting 
Engagement and proxy voting are key to fulfilling our stewardship responsibilities. For discretionary mandates, we retain voting rights and follow Amova AM’s proxy voting policy. We consider recommendations from Institutional Shareholder Services and scrutinize proposals on executive pay, board composition, and director reappointments. 

 

Improving ESG Integration 
While we aim for high ESG standards, integration levels vary among managers. Where gaps exist, we encourage improvement. For instance, one manager investing in small-cap stocks lacked sufficient ESG data. Through our guidance, they developed an ESG checklist and later enhanced it into a five-level rating system, improving their stock selection process. 

Some managers are now explicitly embedding ESG into their investment models, including climate risk assessments. Others are developing proprietary tools to deepen ESG integration. While progress is evident, we remain committed to ensuring ESG becomes a consistent and effective part of all external managers’ investment strategies. 

Important Information

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