Evolve North American Gender Diversity Index ETF
TSX TICKER: HERS
DEALER USE ONLY
1
Disclaimer This presentation is not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended as a summary only and is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses dated February 5, 2018, March 21, 2018, July 30, 2018, and August 10, 2018. Commissions, management fees and expenses all may be associated with exchange traded mutual funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Investors may incur customary brokerage commissions in buying or selling ETF units. Certain statements contained in this presentation may constitute forward-looking information within the meaning of Canadian securities laws. Forwardlooking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "anticipate", "believe", "intend" or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law. Bloomberg and Bloomberg.com are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved. The contents of this piece are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. Published January 7, 2019.
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The Importance of Gender Diversity Gender diversity has become important for global companies
Gender Diversity
= Better Corporate Performance Why? • Happier and more productive workforce • Overall better understanding of the end consumer • Organizations with greater transparency and better governance
• Bottom-line: More Forward Thinking = Better Performance 3
Gender Parity: Economic & Fairness Argument
$11 trillion
19%
the amount of investable assets that women now control1
the percentage of women representation of the S&P/TSX Composite Member Boardcontrol2
1 Daisey 2
Maxey, “Where are the Female Fund Managers?� The Wall Street Journal, July 6 2015 Beyond the Headlines, CIBC June 5, 2017
4
The Gender Gap Women are underrepresented at every level of the corporate pipeline
Source: “The Power of Parity: Advancing Women’s Equality in Canada”, McKinsey & Company, June 2017
5
Research From Move the Dial
Source: Move the Dial Whitepaper (Benchmark Report 2017)
6
Source: Move the Dial Whitepaper (Benchmark Report 2017)
7
Source: Move the Dial Whitepaper (Benchmark Report 2017)
8
Gender Diversity Pays Off
More gender diverse companies offer these returns with lower volatility Source: Move the Dial Whitepaper (Benchmark Report 2017)
9
Increased Gender Diversity = ROI
Source: Diversity Matters. McKinsey & Company, 2015
Source: https://www.morganstanley.com/ideas/gender-diversity-investor-guide
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About Equileap ▪ ▪ ▪ ▪
Not-for-profit organization Founded in 2016 by Diana van Maasdijk and Jo Andrews Mission: Accelerate progress towards gender equity in the workplace, using the power of investments, knowledge and donations Two co-founders have extensive experience in private and public philanthropy, specialising in women’s rights.
Diana van Maasdijk
Jo Andrews
Co-Founder & Executive Director
Co-Founder & Director of Social Impact
Previously Head of Philanthropy Advice at ABN-AMRO Private Banking and Director of Development and Communications at Mama Cash
Previously Director of the Ariadne Network and of the Sigrid Rausing Trust
Invest
Educate
Donate
Encourage private and institutional investors to diversify their portfolios with a unique set of data and financial products on gender equality
Provide key information and organize thematic events to increase overall gender awareness and support companies in their good practices.
Support women and girls through social impact projects that tackle the root causes of gender inequality funded by grants and loans. 11
Equileap’s Mission & Activities THREE INTERLOCKING STRATEGIES
INVEST
GENDER DATABASE & SCORECARD
Encourage investors to incorporate gender equality into their investment processes GRANTS with a unique set of data and a variety of &tools. LOANS
GRANTS & LOANS
EDUCATE
GENDER EQUALITY REPORTS
Provide key information and increase awareness on gender equality in the workplace and support companies in their DONATIONS good practices.
DONATIONS
DONATE GENDER EQUALITY INDICES
RAISING AWARENESS
Support women and girls through social impact projects that tackle the root causes RAISING of gender inequality funded by grants and AWARENESS loans.
Investing in Gender Equality – October 2017 12
Equileap Global Report GENDER EQUALITY GLOBAL REPORT & RANKING o Updated annually o Top 200 companies globally o Insights per country & sector Read the Full Report
SOME KEY FINDINGS (2018) ▪ There are now 8 companies graded with a B+, whereas in 2017 the highest grade was a B.
TOP 10 COMPANIES
▪ Top 3 sectors are Communications (32%), Financial (27%) and Utilities (21%) ▪ Top 200 companies have a significantly better gender balance at all levels compared to the rest of those researched. Gender Equality Global Report & Ranking – 2018 13
Equileap Gender Scorecard Equileap’s Unique Research Methodology ▪ Fact-based methodology developed to assess companies on their gender equality ▪ Scorecard utilizes 19 gender equality criteria covering four categories:
▪ ▪ ▪ ▪ ▪
CATEGORY A
CATEGORY C
Gender Balance in Leadership & Workforce
Policies promoting Gender Equality
Non-Executive Board Executive Board Senior Management Workforce Promotion & Career Development
CATEGORY B
▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Training & Career Development Recruitment Strategy Freedom from Violence, Abuse & Sexual Harassment Safety at Work Protection of Human Rights Social Risks in Supply Chain Supplier Diversity Employee Protection
Equal Compensation & Work-Life Balance ▪ ▪ ▪ ▪
CATEGORY D Fair Remuneration Equal Pay Parental Leave (primary & secondary) Flexible Work Options
Commitment to Women’s Empowerment
▪ Commitment to Women’s Empowerment ▪ Gender Audit
Investing in Gender Equality – October 2017 14
Equileap North American Gender Equality Index THE MOST COMPREHENSIVE CORPORATE DATABASE ON GENDER EQUALITY ▪ Analysis of over 3000 publicly-traded companies in 23 developed countries with a market capitalisation over USD 2 billion ▪ In collaboration with the Sustainable Finance Group at Maastricht University ▪ Insights per country, sector, sub-sector and 19 criteria ▪ Continuously updated throughout the year
SELECTION PROCESS FOR INDEX Top 150 North American Large Caps - diverse, durable companies through a Gender Lens 3,000 GLOBAL COMPANIES (Equileap Gender Diversity Database) Minimum market cap US$ 2 billion Companies ranked by Equileap Gender Diversity Scorecard
1,000 NORTH AMERICAN COMPANIES TOP 150 COMPANIES Sorted according to Equileap Gender Diversity Scorecard
TOP 150 COMPANIES Included in the Index, equal weighted Investing in Gender Equality – October 2017 15
Equileap North American Gender Equality Index MAKING A DIFFERENCE IN THE US & CANADA CATEGORY B & C - Equal Compensation & Work-Life Balance - Policies Promoting Gender Equality
% of firms
CATEGORY A / Total score in Gender Balance in Leadership & Workforce 30% 25% 20% 15% 10% 5% 0%
Avg:51%
Avg:15%
0% 4%
Fair Remuneration
18%
Training & Career Development
89% 44%
Recruitment Strategy
100%
% of maximum score
41%
Safety at Work
CATEGORY C / Total score in Policies Promoting Gender Equality
Human Rights
17%
Social Supply Chain
19%
80%
79%
85%
% of firms
60% 40% 20%
Avg:31%
0%
0%
0%
17%
33%
47%
Employee Protection
Avg:92%
50%
67%
83%
100%
99%
99%
20% 40% 60% 80% 100% 120%
Non-Index
Index
% of maximal score
Investing in Gender Equality – October 2017 16
Index Constituents1
DIVERSE, DURABLE COMPANIES
1
Select companies. Portfolio as at December 31, 2018.
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HERS Performance Growth of $10,000
Growth of $10,000 $11,700
HERS.B (Unhedged)
HERS (Hedged)
$11,700
$11,200
$11,200
$10,700
$10,700
$10,837.33
$10,200
$9,929.05
$9,700 $9,200 Sep-'17
$10,200 $9,700
Dec-'17
Mar-'18
Jun-'18
Sep-'18
Dec-'18
$9,200 Sep-'17
Dec-'17
Mar-'18
Jun-'18
Sep-'18
Dec-'18
Performance Total Returns* (%)
1 MTH
3 MTH
6 MTH
YTD
1 YR
SI**
HERS
-8.90
-12.17
-7.36
-7.23
-7.23
-0.71
HERS.B
-6.65
-7.70
-3.96
1.17
1.17
8.37
Source: Bloomberg as at December 31, 2018. ** Performance since inception on September 20, 2017. * For the period ending December 31, 2018. The indicated rates of return are the historical annual compounded total returns including changes in per unit value and reinvestment of all dividends or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The rates of return shown in the table are not intended to reflect future values of the ETF or returns on investment in the ETF. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. The Growth of $10,000 chart is based on the historical daily net asset value per unit (NAV) of the ETF, and represents the value of an initial investment into the ETF of $10,000 since its inception, on a total return basis. Distributions, if any, are treated as reinvested, and it does not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder. The NAV values do contemplate management fees and other fund expenses where paid by the fund. The chart is not a performance chart and is not indicative of future value which will vary. Commissions, management fees and expenses all may be associated with exchange traded mutual funds (ETFs). Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Investors may incur customary brokerage commissions in buying or selling ETF units. Investors should monitor their holdings, as frequently as daily, to ensure that they remain consistent with their investment strategies. 18
Large Cap Equities with a Gender Lens Evolve North American Gender Diversity Index ETF INDICATIVE YIELD1
AVERAGE MARKET CAP
MINIMUM MARKET CAP
NUMBER OF HOLDINGS
CLASSES
2.68%
USD 77 BILLION
USD 2 BILLION
150
HEDGED & UNHEDGED
MANAGEMENT FEE2
MANAGEMENT EXPENSE RATIO (MER)2,3
INDEX REBALANCING (EQUAL WEIGHT)
RISK RATING
INDICATIVE SPREAD4
0.40%
0.55%
ANNUALLY with Quarterly Reviews
MEDIUM
5bps
INDUSTRY ALLOCATION Name GEOGRAPHIC ALLOCATION Name United States Canada
As at December 31, 2018 1 Gross of MER 2 Plus applicable sales tax 3 Includes fixed administration fee of 0.15% 4 Estimate only
Weight 85% 15%
Consumer, Non-cyclical Financial Consumer, Cyclical Technology Communications Industrial Basic Materials Energy Utilities
Weight 22% 22% 13% 12% 10% 7% 5% 5% 4%
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Who Should Consider HERS?
Investors who are: Interested in companies that promote gender diversity Employees who encourage diversity & inclusion within the workplace Seeking capital appreciation in large cap North American equities
Looking to promote gender diversity through RESP contributions Interested in Socially Responsible Investments and ESG mandates
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