What can the Mercer Responsible Balanced Fund actually invest in?
The fund's Statement of Investment Policy and Objectives (SIPO) defines the asset classes it can hold and the allowable target / min / max weights for each.
Strategic asset allocation ranges
| Asset class | Target | Min | Max |
|---|---|---|---|
| Cash and cash equivalents | 4% | 0% | 20% |
| New Zealand fixed interest | 10% | — | — |
| International fixed interest - Overseas sovereign bonds | 11% | — | — |
| International fixed interest - Global Credit | 10% | — | — |
| Private Debt | 0% | 0% | 10% |
| Other fixed interest | 5% | — | — |
| Total fixed interest | 36% | 21% | 51% |
| Total income assets | 40% | 30% | 60% |
| Listed Infrastructure | 2% | — | — |
| Unlisted Infrastructure | 3% | — | — |
| Unlisted property | 3% | — | — |
| Total real assets | 8% | 2% | 20% |
| Australasian equities | 13% | 3% | 23% |
| International equities | 39% | 29% | 49% |
| Total growth assets | 60% | 40% | 70% |
Mandate flexibility (sum of max − min across all ranges): 178%. Moderate range — some manager latitude within a broader mandate.
Explicit exclusions (9)
- Controversial weapons (cluster munitions, anti-personnel landmines, biological/chemical/nuclear weapons manufacturers; automatic/semi-automatic civilian firearms)
- Tobacco (production, nicotine alternatives, tobacco-based products; >50% revenue from tobacco distribution/wholesale/retail/services)
- Russian assets (sanctioned entities, Russian-incorporated shares, Russian sovereign bonds, Russian currency, Russian private markets assets)
- Coal, oil or gas (GICS sub-industries: Oil & Gas Drilling, Equipment & Services, Integrated Oil & Gas, Exploration & Production, Thermal Coal; companies with >15% revenue from extraction and proved/probable reserves)
- Adult entertainment (>10% revenue)
- Alcohol (>10% revenue)
- Gambling (>10% revenue)
- Depleted uranium (involvement in development or production of depleted uranium ammunition/armour)
- Sustainable Global Credit additional: Nuclear weapons, Depleted uranium, Tobacco (>10% revenue from distribution/wholesale/retail/services), Cannabis (>10% revenue), Saudi Arabia, Adult entertainment (>10% revenue), Alcohol (>10% revenue), Gambling (>10% revenue), Live animal exports (>10% revenue), Animal fur production (>5% revenue), Thermal coal mining (>5% revenue), Oil sands production (>5% revenue), Fossil fuels (>15% revenue from exploration/extraction or primary GICS sub-industry)
Responsible-investment approach
Mercer applies a Sustainable Investment Policy incorporating four techniques: ESG integration, stewardship (engagement and proxy voting), exclusions (rules-based screens covering controversial weapons, tobacco, Russian assets, and additional responsible/sustainable criteria for labelled funds), and investment in sustainability themes. Funds labelled 'Responsible' have additional exclusions criteria applied and are certified by the Responsible Investment Association of Australasia (RIAA).
Derivatives policy
Funds (including underlying managers) may use derivatives to protect against unfavourable price changes, enhance returns as a cost-effective alternative to purchasing physical assets, implement fund investment objectives, and manage currency exposure. Derivatives related to each asset class are permitted provided the total market value exposure remains within permitted asset allocation ranges.