What can the Mercer Responsible Hedged Global Fixed Interest Index 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 | 0% | 0% | 5% |
| International fixed interest | 100% | 95% | 100% |
Mandate flexibility (sum of max − min across all ranges): 10%. Narrow range — index-tracking style with limited drift.
Explicit exclusions (9)
- Controversial weapons
- Tobacco
- Russian assets
- Coal, oil or gas (GICS sub-industries or >15% revenue from extraction with proved/probable reserves)
- Adult entertainment (>10% revenue)
- Alcohol (>10% revenue)
- Gambling (>10% revenue)
- Depleted uranium (involvement in development or production)
- Fossil fuels (as per Bloomberg MSCI Global Aggregate SRI Select ex-Fossil Fuels Index methodology)
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.