High Yield

To manage sustainability risks, it is crucial that the companies in which Simplicity invests through its funds conduct their operations in a responsible manner. The company employs norm-based screening to ensure compliance with good governance practices. At a minimum, Simplicity expects these companies to adhere to laws and international norms and conventions, such as the ILO conventions, UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the OECD guidelines for multinational enterprises. Simplicity also expects a certain level of compliance regarding other types of environmental, social, and governance-related incidents. All holdings in Simplicity’s funds undergo regular screening to verify that no violations have occurred. The norm-based screening is conducted by a third party.

If a company held in one of Simplicity’s funds is found to have been involved in an incident or violation, the fund company will take action. These actions may include initiating an engagement dialogue to understand the company’s view of what happened, what measures have been taken, and what measures will be taken to address the issue. The dialogue, together with other information collected by Simplicity, forms the basis for deciding whether the company remains investable or whether the holding should be sold. Simplicity’s funds will not invest in companies that systematically violate international norms and conventions without showing a willingness to change and/or have not compensated third parties who have suffered verified serious harm as a result of the violation.

Quantitative and qualitative analysis, together with screening, are used to achieve the environmental or social characteristics promoted by the fund. The fund managers regularly review sustainability data providers to ensure data quality. The data used is based on both reported and estimated information. The fund company has concluded that any potential limitations in data or methodology do not impact the fund’s ability to meet its environmental or social characteristics.

The binding elements of the fund are to 1) make at least 20 % sustainable investments and to promote environmental or social characteristics, with the remaining portion promoting environmental and social characteristics, 2) the share green, social, sustainable and sustainability linked bonds should be at least 5 % of the fund, 3) adhere to Simplicity’s responsible investment policy, including the exclusion criteria as well as the inclusion, norm-based screening, and engagement strategies. Due diligences are carried out regularly by internal controls.

Statement on principal adverse impacts of investment decisions on sustainability factors (PAI) – Simplicity AB.

Updated: 2025-12-05

This text contains sustainability-related information for Simplicity High Yield, a light green fund according to EU Sustainable Finance Disclosure Regulation (SFDR Article 8). This means that the fund promotes environmental or social characteristics but has no sustainable investment objective.

The fund promotes environmental and social characteristics through exclusion, inclusion, norm-based screening, and engagement. Additionally, the fund makes investments with a sustainable objective. Several sustainability indicators are used to measure the attainment of the environmental or social characteristics promoted by the fund as well as the fund’s sustainability objectives. These indicators are considered in investment decisions and are regularly monitored.

At least 20% of the fund will be invested in sustainable investments. The fund’s sustainable investments are linked to an environmental or a social goal. The goals of the fund’s sustainable investments include the UN Sustainable Development Goals, the objectives of the Paris Agreement, and the environmental objectives of the EU Taxonomy. A sustainable investment must contribute to at least one of these sustainability goals.

The fund considers principal adverse impacts on sustainability factors to ensure that the sustainable investments do not cause significant harm to any other environmental or social investment objectives through two main methods: exclusion and norm-based screening. Norm-based screening and exclusion are carried out in accordance with Simplicity’s responsible investment policy.

According to the fund terms, the fund can have a maximum of 10 % in cash held as liquidity. The fund may also use derivatives. The remaining portion of the fund is invested in assets that promote environmental or social characteristics.

The fund excludes investments in the following sectors: tobacco, cannabis, alcohol, pornography, gambling, weapons, fossil fuels, and GICS sector 10. Additionally, there are specific requirements for energy production based on fossil fuels and nuclear power. Norm-based exclusions are also applied to companies subject to applicable EU or UN sanctions. Thresholds are used to determine whether a company is related to any of the mentioned sectors or activities.