BIT Capital Sustainability

Sustainable investing is an integral part of BIT Capital’s investment processes. BIT Capital specifies how ESG issues are implemented in the investment strategy. BIT Capital also integrates various approaches to sustainable investing into the investment process of the following investment products: BIT Global Internet Leaders 30 and BIT Global Leaders. With the help of these guidelines, sustainable investing is further defined and its implementation is determined by the investment team.

The sustainable investing guidelines are recognized as an additional risk management tool. BIT Capital believes that incorporating ESG criteria can positively impact the investment process and have an impact on return risk. BIT Capital’s long-term investment horizon further contributes to a positive risk-return profile.

a. Negative and exclusionary screening for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:

BIT Capital excludes companies based on their business activities. Exclusions are used to limit exposure to industries and companies that are exposed to material sustainability risks. The following MSCI grids are applied for this purpose.

• do not violate the 10 principles of the UN Global Compact network (https://www.unglobalcompact.org/what-is-gc/mission/principles);
• do not generate more than 30% of sales from the mining or distribution of thermal coal;
• do not generate more than 5% of sales from the manufacture of tobacco products;
• do not generate more than 10% of sales from the production of conventional weapons;
• do not generate sales from the production and/or distribution of weapons under the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction (“Ottawa Convention”), the Convention on the Prohibition of Cluster Munitions (“Oslo Convention”), and biological and chemical weapons under the respective UN conventions (UN BWC and UN CWC);
• do not acquire bonds from states classified as “unfree” according to the Freedom House Index.

BIT Capital’s relevant funds may invest in securities for which so far no data is available from the data provider and thus cannot be determined whether the above exclusion criteria have been violated. As soon as data is available for such securities, the exclusion criteria mentioned above will be met. They therefore apply to 100% of the titles that can be screened accordingly.

b. ESG integration for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:

ESG integration methodology

To systematically ensure compliance with sustainability criteria, BIT Capital works with MSCI ESG Research, a leading international provider of environmental, social and governance analysis and ratings. MSCI ESG Research data on sustainability risks is incorporated into the investment process. All investment teams have access to MSCI’s ESG database.

BIT Capital is a signatory to the United Nations-backed Principles for Responsible Investment. They require all members to consider environmental, social and governance issues in their investment strategy and to act as a shareholder.

Corporate governance issues in their investment strategy and to integrate active participation as shareholders. These goals are in line with the guidelines of sustainable investing and are part of BIT Capital’s DNA as an active, long-term investor.

c. Inclusion of sustainability risks for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:

Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the fund’s assets. Sustainability risks can also impact other risk types and contribute as a factor to their materiality.

The guidelines for sustainable investing section of these guidelines lists exclusion criteria aligned with sustainability aspects that BIT Capital observes. This prevents, for example, investing in securities whose issuers are involved in controversial business areas.

In addition, at least 51% of the respective fund assets are screened and evaluated in advance by MSCI ESG Research for sustainability aspects. In addition, BIT Capital invests at least 51 % of the value of the UCITS funds managed by BIT Capital in equities and equity-equivalent securities as well as interest-bearing securities and money market instruments that are selected under consideration of sustainability criteria and have been analyzed and positively assessed under environmental and social criteria. Within the scope of this minimum quota of 51%, only securities with an ESG rating of at least BB can be held. This strategy reduces the sustainability risks contained in the assets of the funds, so that the overall risk for the respective funds is also reduced.

The implementation of these guidelines is reviewed at least once a year by the Responsible Act Team. This regular review will assess whether the guidelines:

1. are being implemented as intended, and
2. are consistent with national and international regulations, principles and standards applicable to the sector in which BIT Capital operates.

Where no update is required, these guidelines are applied consistently. When an update is required, BIT Capital management must formally approve it. BIT Capital also works continuously to improve these guidelines in line with its long-term focus and responsible management of risks and resources. These guidelines are issued by management and apply to the entire company.