Theta

Sector's Theta team manages the Sector Zen fund, a long/short equity fund focusing on neglected areas within the Japanese equity market. The investment team aims to provide attractive returns through exploiting inefficiencies within one of the most under-researched developed equity markets in the world, utilising a value-based and contrarian approach. Value is the predominant criteria for stock selection, since this technique has been consistently successful in Japan. The team has a strong belief in concepts developed by Benjamin Graham.

Sector Theta AS

The team is organised as a separate investment company, Sector Theta AS, a regulated investment firm, authorised by the Financial Supervisory Authority of Norway to provide active management services and investment advice.

WARNING!

We have been informed that a clone of Sector Theta AS is unlawfully marketing and offering investment services through the website www.sectorthetaasa.com. Sector Theta AS has no connection to the website, and the website www.sectorthetaasa.com is using contact information for Sector Theta AS without permission. More information here.

Sustainability-related disclosures

As of 27 December 2022

Introduction

In March 2021, the Sustainable Finance Disclosure Regulation (“SFDR”) came into effect. SFDR seeks to establish a pan-European framework to facilitate sustainable investment, by providing for a harmonised approach in respect of sustainability-related disclosures to investors within the European Union's financial services sector.

The scope of SFDR is extremely broad, covering a wide range of financial products and financial market participants. It seeks to achieve more transparency regarding how financial market participants integrate Sustainability Risks into their investment decisions and the consideration of adverse sustainability impacts into the investment process.

The objectives of SFDR are to

(i) strengthen protection for investors of financial products,

(ii) improve the disclosures made available to investors from financial market participants and

(iii) improve the disclosures made available to investors regarding the financial products, to amongst other things, enable investors make informed investment decisions.

Under Article 3 and 4 of the SFDR, information must be published on the integration of sustainability risks into investment decisions and/or investment advice, as well as on the consideration of the principal adverse impacts of investment decisions and/or investment advice on sustainability factors.

Integration of Sustainability Risks & ESG Factors (SFDR Article 3)

The Investment Manager may consider ESG factors but these are not systematically integrated into the investment decision process for the Fund. The Investment Manager will consider Sustainability Risks from a holistic standpoint as part of its fundamental analysis and as a risk management tool to the extent it has an impact on its investment strategy.

The Investment Manager assesses how a company’s ESG practices may present a risk to the relevant investments. The Investment Manager may decide to either exclude investments which present certain Sustainability Risks or include investment with ESG-related risks if it deems that these risks are appropriately reflected in the market price.

The Investment Manager adheres to the Norges Bank observation and exclusion of companies list (the “Exclusion List”), ensuring that the Fund does not invest in companies in contravention of the Exclusion List.

Consideration of Principal Adverse Sustainability Impacts on Sustainability Factors (SFDR Article 4)

The Investment Manager does not currently consider the principal adverse impact of investment decisions on Sustainability Factors, as the ESG-data quality and availability from the underlying companies in which it invests is still low. However, this is a subject to review. The Investment Manager reserves the right to reconsider this position in the future when relevant information is available.

Remuneration Policy (SFDR Article 5)

The purpose of the Company’s remuneration policy is to establish arrangements for compensation that may help the Company to attract highly skilled and qualified employees, develop and retain key persons and encourage perpetuity and continuous progress to reach the Company’s goals, while at the same time ensuring the integrity of the Company’s risk management.

The remuneration policy determines the following:

(i) To which of the Company’s employees and representatives this remuneration policy shall be applicable, in accordance with the abovementioned regulations concerning the calculation and payment of remuneration (Identified Employees). Such employees are divided into (a) executive management, (b) employees with control functions, (c) representatives and (d) employees whose responsibilities are of significant importance to the Company's risk exposure. Regarding the last category in (d) above, employees with similar remuneration as executive managers and other employees with tasks of considerable importance to the Company's risk exposure will be considered separately;

(ii) Whether the Company has more than 50 employees and/or total of assets under management that exceeds certain thresholds (and thus required to establish a remuneration committee); and

(iii) Which frameworks and guidelines that will apply to the calculation and payment of both the fixed and variable remuneration to those defined as “Identified Employees”.

The remuneration from the Company to Identified Employees may consist of a fixed and a variable element. The fixed element shall be determined on an individual basis and be sufficiently high (so that the Identified Employees of the Company are not dependent on any relevant variable remuneration, enabling the Company to not disburse the variable part of the remuneration).

The Company does not have guaranteed bonuses or sign-on fees.

For Sector Theta, the sole Identified Employee is the CEO.

Fund Classification
For the purposes of SFDR, Sector Zen Fund qualify as an Article 6 financial product.