Responsible Investment

Responsible Investment Policy

Our Responsible Investment (RI) Policy is contained within the Octagon SIPO which can be found on this website under the Forms and Documents section. The SIPO contains the complete RI policy while this web page provides a summary of our RI policy and how we use it.

The Octagon Responsible Investment Policy is split into three parts.

1. Screening of investment products

Before Octagon makes a direct investment into a financial product (as opposed to an indirect investment – see ‘Investments into unrelated underlying funds’ below) for the fund we will use screening tools provided by MSCI, as described in MSCI’s Business Involvement Screening Research Methodology dated August 2025,  to identify whether the relevant entity derives revenue from any of the following activities:

• The production of whole weapon systems, delivery platforms or components of cluster munitions; production of whole weapon systems or components of landmines and biological or chemical weapons; production of depleted uranium weapons, blinding laser weapons, incendiary weapons or weapons with non-detectable fragments (or is involved indirectly through ownership ties to companies involved in such products).
• The production of nuclear weapons, exclusive and dual-use delivery platforms capable of delivering such products, intended and dual-use components of such products, services provided for such products (or is involved indirectly through ownership ties to companies involved in such products or services).
• The production of tobacco products (including traditional and alternative tobacco smoking products).
• The manufacture or sale of automatic or semi--automatic weapons intended for civilian use.

Except as expressly noted, the screening we apply does not extend to the sale or distribution of these products. For example, we exclude tobacco manufacturers but not retailers who sell tobacco products e.g. supermarkets.

If the screening process identifies that a company derives revenues of 5% or more from the activities listed above, then no investment is made. This is done for moral and ethical reasons, i.e. we do not wish to be associated with these activities. If the Investment Manager makes a direct investment and the screening process subsequently identifies that the relevant entity derives revenues of 5% or more from one of the activities listed above, the investment will be sold in a reasonable timeframe taking into account the particular circumstances, market conditions, and the duty to act in the best interest of investors. The Investment Manager will apply the screening check against the funds’ direct investments at least monthly.

Where we’ve identified companies through our exclusion screening process we will place the names of these companies on an exclusion list (download PDF here) which will be made available and updated on our website every six months.

2. Consideration of ESG factors

For directly held equities, listed property and fixed interest securities and cash and cash equivalents, the Investment Manager uses its ESG Risk Assessment framework to help identify the material ESG risks and opportunities associated with our investments.

This ESG Risk Assessment utilises data and research from various sources including Forsyth Barr’s Carbon and ESG (CESG) ratings and related methodology, LSEG Workspace and MSCI controversy data, as well as information from other sources and information made available in the public domain. 
The Investment Manager collates information from the sources listed above in order to perform its qualitative assessment of the ESG risks and opportunities. The Investment Manager then determines the extent to which these risks and opportunities are considered in its investment decision making. However, ESG factors may not be determinative of the Investment Manager’s investment decisions, and Investment Manager may include investments that have less favourable ESG ratings. 
Forsyth Barr’s CESG ratings and methodology are available on its website - www.forsythbarr.co.nz/corporate-news-events/c-and-esg-ratings-report-2024/. 

Limitation: as at the date of this SIPO Forsyth Barr’s CESG methodology only covers certain NZX listed issuers. Where we hold an investment in a NZX listed issuer not covered by Forsyth Barr’s CESG ratings and / or an issuer listed on another exchange, we will source the necessary information from those sources listed above. In addition, where we invest into an underlying scheme that we don’t manage, the external investment manager does not apply our ESG Risk Assessment to its investment decision-making.

3. Controversies

From time-to-time unexpected information about the companies we invest in may become available.
If we determine further investigation of the unexpectedly disclosed information is warranted, the Investment Manager’s Investment Committee will apply the following steps to determine what response and actions, if any, should be undertaken:

• The Chair will direct the Investment Manager’s ESG team to investigate further by applying the Investment Manager’s ESG Risk Assessment methodology detailed above and present the information and its assessment to the Investment Committee
• The Investment Committee will consider the information provided by the Investment Manager’s ESG team and determine whether the issuer’s activities are negatively flagged and / or inconsistent with a positive assessment under the assessment criteria of the Investment Manager’s ESG Risk Assessment
• The Investment Committee will determine an appropriate action which may be

1. 1. to note for internal reference only,
   2. to note and partially or fully sell the relevant financial products,
   3. to undertake and advise investors via its website and / or via other media,
   4. undertake and update investors via its website and / or via other media

• If partial or full divestment is to occur the investment will be sold in a reasonable timeframe taking into account the particular circumstances, market conditions, and the duty to act in the best interest of investors.

A copy of the Investment Manager’s Investment Committee charter, detailing all of the committee’s responsibilities and activities is available on the Investment Manager’s website.

Investments into unrelated underlying funds

Before an Octagon fund invests into an underlying managed investment scheme that we do not directly manage, we will consider the responsible investment framework for that scheme. Octagon will always seek to invest in underlying schemes with responsible investment frameworks comparable to the Octagon Investment Funds, where it can do that without compromising the funds’ other investment objectives.

At the end of each quarter, Octagon will make available on its website a list of any of the underlying scheme’s direct investments (as are available to the Investment Manager) that appear on our exclusions list as determined by our screening activities.

Voting Policy

Octagon will exercise its voting power in relation to all of the Octagon Investment Fund’s eligible assets. Octagon has contracted with Institutional Shareholder Services (ISS), the world's leading provider of corporate governance and responsible investment solutions to provide proxy research, voting and reporting to Octagon.

When Octagon appoints an investment manager to one of our funds we will require that manager’s voting policy and procedures to be consistent with Octagon’s policies. We also require the investment manager to provide regular reports on their voting in relation to any of the Octagon Investment Funds’ assets.

Exposure to Securities Appearing on our Exclusion List

All assets are subject to our Negative Screening process, however, only those funds directly managed by us are prohibited from investing in the issuers that appear on our Exclusion List.  Where we are not the Investment Manager we detail the securities in that sub-delegated Investment Manager’s investment portfolio that also appear on our Exclusion List. 

As at 30 September 2025 the Income Fund, Balanced Fund and Growth Fund each had an investment in the Hunter Global Fixed Interest Fund.

Hunter Global Fixed Interest is a fund offered by Harbour Asset Management.  Harbour Asset Management as the Manager of the Hunter Global Fixed Interest Fund has appointed PIMCO Australia (PIMCO) as the fund’s Investment Manager.

At that date, the Hunter Global Fixed Interest Fund had financial exposures to entities associated with Altria Group Incorporated, The Boeing Company, General Electric Company, Honeywell International Incorporated, Lockheed Martin Corporation, Northrop Grumman Systems Corporation, Rolls-Royce Holdings and RTX Corporation, companies that participated in activities identified by our Negative Screening process and that subsequently appear on our Exclusion list (available here).

The securities issued by the companies detailed above were not specifically targeted for investment by PIMCO but are the consequence of financial hedging activities undertaken by PIMCO when managing the credit risk (the risk of default) within the fund’s portfolio of investments.

As at 30 September 2025 the Global Equities Fund, Balanced Fund and Growth Fund each had an investment in the Vanguard ESG International Stock ETF. This ETF is a temporary part of the funds’ investment strategy as Octagon undertakes an external global equities manager review.

At that date, the Vanguard ESG International Stock ETF had a financial exposure to Honeywell Automation India Limited, an entity associated with Honeywell International Incorporated. The ETF passively tracks an index, so the inclusion of this particular security was not a specific investment decision made by the sub-delegated Investment Manager.

Investments identified by the Office of the United Nations High Commissioner for Human Rights (OHCHR).

We have compared the investment exposures of the Octagon Investment Funds to the Human Rights Council report on Israeli settlements in the Occupied Palestinian Territory, including East Jerusalem, and in the occupied Syrian Golan, dated February 2020, as well as the version updated as at September 2025, which can be found here.

Using Octagon Investment Funds Scheme data as at 30 September 2025, our investigation has determined that the scheme has exposures to companies on this list through its investments in the Hunter Global Fixed Interest Fund, Te Ahumairangi Global Equity Fund and the Vanguard ESG International Stock ETF. 

We calculate these to be:

The specific companies identified are listed below:

Booking Holdings Inc Ord
Airbnb Inc-Class A
Bank Leumi Le Israel Bm Ord
Bank Hapoalim Bm Ord
Israel Discount Bank Ltd Ord
Bezeq Israeli Telecommunication Corp Ltd Ord
First International Bank Of Israel Ltd Ord
Fosun International Ltd Ord
Matrix It Ltd Ord
Mega Or Holdings Ltd Ord
Construcciones Y Auxiliar De Ferrocarriles Sa Ord
Partner Communications Company Ltd Ord
Tripadvisor Inc Ord
Cellcom Israel Ltd Ord
Ashtrom Group Ltd Ord
Rami Levi Chain Stores Hashikma Marketing 2006 Ltd Ord
Delta Galil Industries Ltd Ord
Elco Ltd Ord
Motorola Solutions Inc Dir
Expedia Group Inc Dir