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ESG

ESG Roundtable: The discussion

ESG Roundtable: The discussion

Friday 4th May 2018
ESG Roundtable: The discussion

ESG has no common taxonomy, so how do you identify companies with such standards?

Richard Tyszkiewicz: There’s a spectrum that starts with screening out certain stocks or sectors and ends with philanthropy. Schemes need to understand where they are on that spectrum and where they want to be.

Tony Filbin: It’s easier to say what it’s not. It’s not ethical investing. Trustees have to identify where an investment strategy is likely to cause a risk to member outcomes. It’s easy in carbon. If you invest in companies that aren’t going to make the transition to a low carbon environment, there is the chance that they’ll underperform. So there’s a clear understanding of risk there. Similarly, with the G in ESG, some firms have been vocal about a link that’s been established between organisations with better governance and better returns. From my perspective, it’s not about good causes; it’s about understanding what processes the fund managers we choose use in their investment strategy and determining whether we believe there’s a risk to outcomes with that.

Catherine Ogden: What we believe is that integrating ESG considerations into investment processes has the potential to lead to better long-term financial outcomes. So ESG is very much thinking about material financial risks to a business as well as the opportunities. In the broader spectrum of responsible investment, there are other areas such as ethical investments; however, these need to be thought of through a different lens.

John Belgrove: Getting that lexicon or terminology defined will help trustees, especially those who are relatively new to this area. I would concur with Richard that we’re looking at a spectrum of issues. You can be in the centre of an ESG-aware agenda and as you go left along that spectrum you might get as far as negative screening. As you go right, you might get as far as thematic mission-based aspects. There are stopping points along those spectrums about whether you invest only in best in class or you screen out the worst. So I’m less convinced it’s about what it’s not because there are many things that can apply under that broad terminology. What’s important is that the conversation has meaningfully changed in the last couple of years. We’ve moved away from aspects that are perhaps more associated with pressure groups and individual clients with clear beliefs to something more mainstream through policymakers, regulators and companies being asked questions about their carbon footprint, for example. So there are a lot of professionals for trustees to ask for help with the terminology, awareness and education. Also because of all that effort and work, the quality of data associated with ESG is improving and that’s allowing investors to take a more granular and informed approach about where they sit and what they need to do if they want to get somewhere different.

What is driving this change? Is it companies seeing the benefits of strong ESG standards, the regulator pushing for higher disclosure or are investors looking for things they weren’t, say, 10 years ago?

Filbin: One of the big drivers for change has been a report by the Law Commission, which specifically mentioned ESG as a risk that trustees have to take into account from a financial perspective. Another reason why asset managers have raised their game is that we trustees have been asking questions. In the request for proposals that I’ve been involved with, we ask fund managers what their ESG strategy is. Quite recently, I ran a beauty parade for a new investment consultant and asked how they were  going to take on the issue of ESG. The more times you ask that question of consultants and fund managers, the more likely it is to be raised on their agenda.

Ogden: Over the last few years we’ve certainly seen an increase in the quantity and quality of questions from our clients in request for proposal processes; critical mass is growing in this respect. The questions are getting much more sophisticated, there’s much less opportunity for a tick box response and so that drives the agenda for asset managers to up their game. That being said, we still meet a fair number of clients and trustees who do not quite have this on their agenda. Yet the regulatory landscape is evolving; think about the Law Commission’s recommendations on pension funds and social investment, the EU High Level Expert Group’s recommendations on sustainable  finance, not to mention the arrival of the EU’s Shareholder Rights Directive; these will all help further build ESG momentum over the course of this year.

When your clients say they don’t have ESG on their agenda, what reasons do they give for not taking an interest?

Ogden: There is still a lack of understanding of what it is. There’s always the misunderstanding that it’s ethical, it’s not material or it’s an add-on extra. It just needs awareness raising and a requirement that it is on trustees’ agendas. Filbin: It depends if you’ve got a professional trustee on the board or not. Professional trustees are more aware of these issues and so are more likely to raise it. I’ve started to put an ESG statement in my chair statements. I’m not required by the regulator to do that, but it’s important that we do it. Obviously, to put an ESG statement in my chair’s statement I have to ask the fund manager what their strategy is, so it is a two-tier approach. The professional trustee community is aware of ESG issues, but it’s the minority of schemes that have a professional trustee.

Belgrove: There are many drivers that are raising awareness, but it’s disingenuous to imply that all trustee boards have been doing this for a long time. That’s not the case for all professional trustee firms or advisers either. I have the privilege of working with many professional trustees and trustee boards and there is a mixed picture. There are also several confusions in the mix, which have driven a misguided avoidance of the issue rather than awareness of the opportunities, like an expectation to pursue fiduciary duty with the assumption that doing something in this space is somehow degrading to future performance, which I strongly argue it is not.

Tyszkiewicz: That goes back to the ethical versus pragmatic approach.

Belgrove: That’s one example of the things that have got in the way. Others have been a strong attention to financial risks and a value at risk-based approach to strategic management, which is different between DB and DC. There are examples of trailblazing markets and clients that are well ahead of this and examples of those playing catch-up. If we talked about the US, it is completely different to Europe and the UK.

Tyszkiewicz: Yes, it’s much more about negative screening in the US. Although we are seeing US managers rushing to try and catch up because if they want to market their products in Europe they have to get up to speed and some of them are struggling with that.

Filbin: It is a huge oversimplification to say that all that’s needed is a bit of trustee education. It is far more than that. Belgrove: I agree. I was just saying that for those that have not managed to get it to the top of their agenda, that’s often the starting point. Duncan Whitfield: It’s unfortunate that three random words from the pensions word search have been put  together. While they are related, they don’t actually make sense as you put them in order. Frankly, a lot of us are paying lip service to ESG. We will put in our report that we adhere to ESG principles and we even crossreference an international statement on what ESG might be and how we support it. The devil is then in the detail about how you strategise those three different components in your investment strategy. Just take governance on its own, there are so many different ways of going at it. Governance is all about process behaviours and the conduct of the trustees, the fund managers and those that the fund managers are investing in. So you have multi layers going on in there, which is a meal in itself.

Tyszkiewicz: The blanket term ‘sustainable’ is perhaps more useful than ESG. Just a few years ago, we were all calling it SRI. So there may well be another acronym coming down the road.

Whitfield: SRI was far more widely understood as a concept. From an ESG point of view, if you have three advisers in the room, they’d give you three different perspectives.

Filbin: What I’m hearing is that asset managers are using ESG as a source of alpha. They are using it as a factor in factor-based investing, so it is being brought more into the mainstream. I absolutely see the importance of this and more asset managers need to put it into their core strategy.

Ogden: There are a number of strategies that schemes can take. In active portfolios, it’s about making sure ESG is integrated as part of fundamental analysis. So as asset managers, we are thinking about environmental, social and governance within the core investment process. That means investment analysts being aware of what ESG is, what it isn’t, thinking about risks from the bottom up and assessing how well the company is managing them. It means investment managers constructing their portfolios with a consideration of company and sector specific ESG risks over different time horizons. Then for index strategies, we see three main options: engagement, tilts and exclusion, which can be incorporated without compromising returns.

Tyszkiewicz: One of the reasons ESG seems to have gone from being a sideshow to mainstream is this more widespread understanding that it’s not about ethics or altruism. It’s about long-term risks and opportunities and that any good long-term investor, like a pension fund, needs to be looking at these things. You have examples like fossil fuels. You can have your own personal beliefs about how the environment should be protected, but you also have the Paris Climate Agreement and stranded assets. Do you want to be the last one holding these assets in your portfolio? It’s back-to-basics capitalism; you want to make long-term profits on your investments. Everyone has their own personal agenda in terms of the ethics of it and those fit in quite nicely. One minute we’ll be doing searches for Shariah-compliant strategies and the next searches for church foundations. That’s perhaps what some people still have in their head when they hear ESG, but that’s really just programming a customer’s benchmark onto an investment platform and excluding certain sectors and that’s not what ESG is about.

Ogden: That’s where a tilting strategy can be beneficial. It enables you to retain very similar returns and keep a diversified portfolio, so you can tilt away to reduce exposure to ESG risks, such as fossil fuel companies that are not preparing for a lower carbon future, as well as potentially increasing exposure to ESG-related opportunities. Exclusion has historically been the simple way that people would do ESG or SRI, but if you create blanket exclusions you have the risk of a concentrated portfolio. You can still exclude on a more selective basis, or even the threat of exclusion can be a potent tool for companies. So there are ways of implementing these ESG strategies which are not the simple way that we’ve seen historically.

Belgrove: Let’s come back to where the fund management community is at the moment. At Aon we have the privilege to research and rate something like 15,000 funds. Included in that would be various due diligence questions around ESG factors and it has been palpable the extent to which the quality of the responses around that have been moving in recent years. The fund management community absolutely gets it. For some, it’s necessary to operate in a given market, for others, it’s not. When you delve into the detail a bit more, it’s quite often the terminology that is the barrier rather than the process. Governance has always been an element of good, responsible portfolio management selection. It stands to reason that a better governed company should get better outcomes.

Whitfield: It’s almost moving back to the environmental word within ESG. This week our active manager came in to beat the managers up because they’re not performing as well as we would like them to. They invested in a Canadian tar sands company and we didn’t want them to do that, but we’ve got nothing in the mandate that says they should exclude anything. They disposed of that asset and they’ve moved some of the money into BAE Systems. Being a local government pension fund, the chair of the committee then beats them up for investing in BAE because BAE are warmongers. My point is that there is a phasing from moving to a more environmental place. It doesn’t happen overnight and actually if we don’t want our active managers to invest in fossil fuels or in anything that could be considered to be related to war, we need to build that in a mandate and have a relationship which we both understand and can work with. This is a journey.

Tyszkiewicz: It goes back to the earlier points we made about embarking on that journey and  understanding where you want to be. There are so many different angles you could take and it helps for schemes and trustees to get involved with the various discussions that are happening. There are industry groupings and bodies and discussions going on in the environmental, social and governance areas that are educating people so that they can then define their own policy because everyone’s policies are different. That’s one of the problems we have when looking for managers. Most of the Nordic clients I deal with love pooled funds, but they all have different ESG policies. Policy definition has to be the first step. Just generally understanding where you want to be and where you want to go and how you want to apply things. For a lot of my clients, the pension members are putting pressure on their pension funds to apply things that are important to them. There are all these different influences that can then help define where you want to be. You can decide if you want to try and implement sustainable development goals and define something along those lines, but it can be quite confusing because there’s such a broad spectrum of things you can try and implement.

Whitfield: There’s a divergence of views on how we measure this. If you have a strategy that says you’re going to go to a certain place and you have to prove it, we’ve landed on a three year, a 10 year and a forever plan where we think we can realistically get to by way of measurement in three-years, 10 years and beyond. Just having that measurement within your strategy, within your ESG framework, is quite important, otherwise we will do what we’ve often done before which is just hide behind passive funds where you don’t really know where any of your assets are invested from one day to the next.

Tyszkiewicz: Non-financial performance measurement is a big work in progress. The good managers we see are giving a lot of information to their clients. If something comes up, if there’s a problem in the portfolio, their clients are the first to find out. We have some clients who are allocating a portion of their portfolio to impact investing, which you absolutely have to measure. Again, that’s a big work in progress. There are all sorts of industry initiatives to create standards but there is no one standard. It’s pretty hard to get the information on that non-financial impact to be able to report it, but things are moving. Ogden: Schemes have a responsibility and a requirement to consider ESG where it’s material. Trustees may choose to incorporate ethical views into their investment beliefs, but that is a separate conversation to what is financially material from a returns perspective.

How do you make sure that each member is happy with the investments in a default fund?

Filbin: The best way, from a DC perspective, to do that is to give the investment choice to the members. As trustees, for the default fund we need to take ESG factors into account from a financial risk perspective and build it into the default fund. For those wanting a Shariah fund or an ethical fund we offer self-select options. Our primary duty of care is with the default fund to ensure that we get the best member outcomes. Best member outcomes include an ESG clause because I like to get better long-term investment results. It is not for us as trustees to decide whether or not to exclude A, B or C. If the members have a strong feeling about that, they access their investment preference through a selfselect fund rather than through the default fund. We explain to members what the self-select options are and where they invest. That’s a better approach than trying to do all things within the default fund.

Belgrove: There’s a whole extra level of education challenge with the members. Measurement has a role to play in that. If you have a fund that has a particular focus but you measure it against a benchmark that doesn’t have that focus, then there’s going to be divergence. Satisfaction is usually derived from positive difference and dissatisfaction from negative difference. If that difference isn’t properly understood, you get a whole new challenge on your hands.

Tyszkiewicz: That’s another choice. Some funds can decide to put part of the portfolio in a sustainable index, but ESG is an opportunity for active managers to get extra returns for those that do well.

Belgrove: From a governance standpoint, you don’t have to do this all overnight. It’s a journey. But some of the consequences of companies not paying proper attention to these issues could be meaningful in the short term. Just read the newspapers at the moment and you’ve got a number of companies having problems with an E, S or G that’s affecting the share price. So the timelines are fascinating in the sense that yes, some of these are long-term plays, but they can actually have near-term financial consequences. Tyszkiewicz: There is a third consideration. We’ve talked about the ethical and pragmatic risk mitigation approach, but with some of my clients, because they’re big public funds, they’re under a lot of scrutiny, so there’s also reputational risk. They don’t want to be answering questions about stock in their portfolio that’s had something horrible happen to it in the press. That is another consideration that’s perhaps less explicit but quite important. Research has found that ESG factors could have a positive impact on financial performance. Is one piece of research enough to get investors thinking that there’s more to this than risk reduction?

Tyszkiewicz: There’s a common understanding that if it’s done properly then at the very least it doesn’t detract from performance and at best it’s a good risk mitigator. There are also opportunities to generate alpha.

Belgrove: The awful phrase is 90% of academic studies find a non-negative correlation with performance.

Tyszkiewicz: That sounds like damned with fake praise.

Belgrove: You can pick and choose your research, but you can also find meta-studies that have a 60% correlation with positive performance on ESG factors. But in many cases people ask: “Prove it to me. Show me that the evidence was there in the past.” That granularity was not there and indeed, those strategies were not being pursued, so you can’t have that sample long-term experience to demonstrate it. So to some degree, there’s an element of it being beliefs led in this area and not looking to historic evidence to pursue these things.

Whitfield: I absolutely get that reputation point. Anecdotally, myself and the chair of the pensions committee were doing the Janet and John round robin of our members. We had a lovely slide about the things that we invest in. Hershey’s was in the middle, nice and safe. But we got absolutely mullered by the audience on the basis of Hershey’s having slave labour picking their chocolate beans.

Belgrove: There’s a sugar obesity angle as well. Whitfield: It is interesting when we’ve had Local Authorities Pension Plan stuff happening around Sports Direct. We certainly shared our concerns with LGIM and Blackrock over slave labour. LGIM’s response was different from Blackrock’s. Reputationally, these things just punch above their weight. It’s quite interesting. In London, from a local government point of view, you’re going to find that after May a whole load of manifestos coming from the labour groups, which will go heavily after carbon reduction. They’re going to be statements in manifestos saying this is where we’re going to be taking our investments. I don’t quite know how that then fits into a decision-making process through your pension committees and the trustees because clearly, it must for the purposes of governance. This reputational stuff is going on in the background which is slightly concerning.

Tyszkiewicz: Some of the pioneers in this field have been quite small church pension funds. Because of the make-up of their members, they’ve been at this for 20 years, whereas others are only coming late to the party. There’s quite an interesting industry body, the Portfolio Decarbonisation Coalition, which is a discussion body looking at the practicalities of how you take carbon out of your portfolio, what impact does it have and how should you do it? I’d encourage any pension fund to get involved with those discussions because there’s only something to gain from it.

Belgrove: Could I just explore the counter-narrative to this? We are coalescing around some of the negative screening and divestment angles here. Ultimately, when you think it through at the highest level, the divestment agenda is challenged. You can only sell stuff to people who are going to buy it. At the same time many of the carbon-heavy industries that maybe institutions are looking to divest from are the sources of R&D for renewable energy and can actually, through an engagement process, be moving in that right direction.

Filbin: I’m not a fund manager, but my understanding is that those fund managers who pursue ESG strategies, invest in companies that are taking action on a low carbon future. So they are carbon companies, but they have actions in place to make that transition.

Tyszkiewicz: That’s my point. It’s exclusion versus engagement. The easiest thing is to exclude them but it’s not necessarily the long-term solution. Statoil, which among oil companies is considered to be relatively good, is about to take ‘oil’ out of its name. It is going to call itself Equinor. It is step by step, you can’t just plunge into engagement, if you haven’t done a few of the other things first.

Ogden: We like to call it engagement with consequences. One of the commitments we’ve made as part of our climate policy is the Climate Impact Pledge. It is a commitment to engage with the largest companies in six key sectors that we have identified as being key to a low carbon transition. We assess them on their climate governance through a detailed methodology and effectively identify areas where we’d like them to improve; we expect them to demonstrate commitment to thinking about the low carbon transition. Those companies that are not responsive and show no willingness to do anything will be candidates for exclusion from our Future World Fund range. Additionally, companies would receive a vote against the chair on behalf of all of LGIM’s equity assets.

How do you select an ESG manager?

Tyszkiewicz: We’ve seen a lack of good quality information on companies. You’ve got ratings for developed markets and equities from the likes of MSCI or Sustainalytics and the good ESG managers that we’ve seen use all of those ratings. They have them, but they don’t rely on them; they do their own research. Especially in emerging markets, for instance, where the information is a lot sketchier, they see that as a source of alpha. They find companies that are underrated perhaps because they’re not good at reporting. They don’t make all the right noises, they don’t publish the right information, but by doing fundamental research on those companies, the managers identify them as improving so they’ll invest in them even though they’re poorly rated because they’ve done their own research. A few years down the line, the industry catches up and they get a higher rating and the stock price goes up.

Whitfield: Can we go back to divestment, which is an unfortunate one, isn’t it? Divestment over time; fine, but the next challenge will be to explain to the lobby groups that we are still investing in Shell and BP because they’re moving towards a more sustainable product. This will be difficult because the lobby groups want to divest and they want us out tomorrow, but that is clearly not a sensible route to follow.

Tyszkiewicz: The Pensions Regulator put this obligation on pension funds in the UK as having to consider ESG where it’s financially material. That covers you in that case. You have a duty to not jeopardise the returns, but in the longer term that can translate into opportunities and fanatic investing. So rather than exclude Shell or BP, you might invest in funds that are looking at cleantech.

Belgrove: The media doesn’t allow the subtlety of the conversation to play out, does it? You have some strong lobbyists that have high-profile cases. At the moment, the parliamentary committee has written to the top 25 UK pension schemes asking: “What are you doing?” It’s making statements about what is right and what is wrong, yet the reality is much more complex.

The results of that are going to be made public; it almost seems like a bit of naming and shaming. Is this the way to move things forward in the pensions industry?

Belgrove: What’s been important is moving away from flag-waving lobbyists to a more considered regulatory, policymaker and integrated approach. That’s the way forward. The lobbyists, as catalysts, clearly have a role to play, the conversation has got to understand the complexities and issues better now and that happens in the mainstream.

Tyszkiewicz: That’s why it’s good that there’s a discussion going on at regulatory level in the UK and Europe. People can point to that and say: “These are common norms that we’re looking to apply,” rather than just pressure from lobby groups.

Whitfield: My accounts were challenged last year on the basis that we invest in fossil fuels. The conversation with the auditor was along the lines of: “Well, that’s clearly not going to be upheld.” If we’d said we were divesting in fossil fuels that would be more likely to be a challenge that needs to be answered with some numbers that actually justify our strategic allocations. It is a matter of time before somebody challenges a public body on the basis of their divestment at a single point or over time.

Filbin: To be fair to some lobbyists, they’re not just going for divestment; they are going for engagement. One particular lobbyist was asking all BP and Shell stockholders to ask at their AGMs whether their remuneration policy was directed at pumping out more fossil fuels or making the transition, which is a fair question to ask. There has been a case in the States brought against trustees for an underperforming fund because they didn’t take ESG into account. As a more general point, trustees, particularly DC trustees, have got to ensure that their fund selection takes into account a whole range of factors. That’s why working with the investment consultants is key for pension funds to make sure that they choose the right funds and get the right outcomes.

Ogden: Absolutely. You need an investment consultant to be advising trustees when they’re not thinking about these issues. If consultants are not providing that advice then the schemes need to question why not.

Tyszkiewicz: I was at a PRI event where all the UK consultants and asset owners in the room were being given a hard time. Everyone, it’s implied, is slightly behind the curve. We see it as an opportunity to stand out from the crowd, but it’s all part of it becoming mainstream and no longer a side issue or an afterthought. You can’t just have a little paragraph in your reports; it’s got to be built in at all levels.

Do you believe that ESG is now mainstream and is no longer niche?

Tyszkiewicz: We have clients in Asia and the US where it’s perhaps less important, but it’s still moving that way. European markets have been at the forefront, and perhaps a little bit more in Northern Europe than Southern Europe. The involvement of Nordic schemes in all these international, supranational bodies is quite telling and it’s something that cannot be left off the agenda. It can’t be just a rubberstamping exercise at the end of a discussion or a process.

Ogden: Traditionally the Nordics and the Dutch have been leading the way but it is encouraging to see that Japan is pushing the ESG agenda forward through its largest government pension scheme. So we’re seeing momentum there, which we hope will push forward more broadly across Asia.

Tyszkiewicz: The Chinese are big on cleantech. They are way ahead of some UK cities in terms of implementing cleantech in public transport. Ogden: In the UK, we see government pension schemes paying a lot of attention to engagement, but it’s also encouraging to see some corporates raising the stakes. For example, HSBC changing their default DC scheme to incorporate climate considerations. While we don’t see all corporate schemes doing that, we need to look to those leaders to set the direction of travel.

Tyszkiewicz: One point worth mentioning. There has been a general investment trend away from just long-only equities and mainstream asset classes into alternatives. That’s a whole different ballgame in terms of applying ESG across all these different asset classes, so we’ve just launched a search for impact infrastructure, for example. It’s a fairly new area for us, it’s going to be interesting, but that’s there because schemes are starting to put so much more into private markets, hedge funds, alternatives and risk premium. ESG is coming up in all of these selection processes as well and managers are having to play catch up. Traditionally it’s the equity managers who pay more attention to this, but scheme trustees and the investment teams have to put pressure on all their asset managers to come up with answers.

Whitfield: It’s difficult. I sympathise with fund managers inasmuch as they could come for an interview in Southwark and we would home-in on ESG and socially responsible ethics. They could go to  another London borough and they wouldn’t be challenged on that. As pooling occurs in London, this is  immediately a bit of a point of difference. I’m really taken by the training and the education to get some of these less informed trustees to understand that this is something to embrace, it’s not something to fear. They’re not there yet. How do you manage that as a fund manager with your standard script to sell your product? It must be awfully difficult when you’re going to those different arenas.

Filbin: I’ve got no sympathy. If you’re a salesman you find out what matters to your customers. You don’t turn up and discover it halfway through your pitch. You find out beforehand what matters to them and then you pitch on that basis.

Whitfield: If you have generic products that do what they say on the tin, how you sell those products, and be genuine, is very hard.

Belgrove: We all try hard to focus attention on value for money; what are you getting for your fees as opposed to what’s the lowest fee. It’s embedded in there and it’s one of the challenges. Would you expect that extra ESG lens and effort applied by the manager to be worth more? I’d say, yes.

Tyszkiewicz: What surprised us from our manager selection exercises that we’ve done for ESG mandates, is quite a lot the final half dozen managers don’t call themselves ESG managers, partly because they’ve been doing it for 20 or 30 years. They have this fundamental belief in assessing stocks in terms of not just financial reports. People need to be aware that you don’t need to pay a premium, but you need to dig deep into what the managers are doing. For instance, we’ve seen managers that are high profile on the ESG scene, they are part of industry bodies, but they have lots of different strategies and asking them awkward questions about how they apply the E and the S can uncover the fact that it’s actually a little bit of an afterthought.

Belgrove: Is the premium relative to what? That sort of activity is usually regarded as an active fund management approach that carries a premium fee relative to a passive approach. So it depends on what the anchor point for the client is in terms of what fee they’re prepared to pay. Passive can obviously engage through voting, but ultimately it has to hold all the stocks in the right proportions. You can’t do anything else. If, however, cost is the driver, then it starts to rule out some of the active strategies.

Tyszkiewicz: There are passive ESG funds for developed markets, but in the emerging markets there’s a real argument to be made for active management.

Whitfield: I have no sympathy with managers around fees. It is part of the journey and managers are not geared up to the fact that I do not expect to pay more for a reduced carbon fund than I pay for an index tracker for doing very little extra than plugging their software into the machine, which brings up red flags not to invest. The industry needs to be moving towards the benefits and the opportunities again and reflecting that through fees. I do get that challenge about why would I move to a higher fee for the same performance? Then you have to use all the stranded assets kind of arguments and so on and so forth; but the industry does need to tune into consistent fee levels for the sustainable funds.

 

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