MERCER PRODUCT GROUP AND CATEGORY DEFINITIONS SEPTEMBER 2016

Transcription

1 MERCER PRODUCT GROUP AND CATEGORY DEFINITIONS SEPTEMBER 2016

2 CONTENTS 1. Executive Summary GIMD Performance Data Used In MercerInsight Performance Universes Product Groups... 4 Asia Product Group... 6 Australia Product Group... 8 Canada Product Group... 9 Emerging Markets Product Group Engagement Services Product Group Equity Sectors Product Group Europe Product Group Factor Investing Product Group Hedge Funds/Absolute Return Product Group Infrastructure Product Group Insurance Linked Strategies Product Group International Equity Product Group International Fixed Product Group International Multi-Asset Product Group Japan Product Group Natural Resources Product Group New Zealand Product Group Alternatives Product Group Passive Product Group Passively Managed ETF Product Group Private Debt Product Group Private Equity Product Group Real Estate Product Group Strategies for Insurers Product Group United Kingdom Product Group United Kingdom DC Product Group US Equity Product Group US Fixed Income Product Group US Product Group MERCER i

3 4. Notes to Tables Currency Acronym Definitions Important Notices MERCER ii

4 1 Executive Summary This document is designed to provide both investment managers and subscribers to MercerInsight with an overview of all the product groups and categories available in Mercer s Global Investment Manager Database (GIMD ) and MercerInsight. It will help investment managers choose the most appropriate product category when entering a new product or changing an existing entry, and will help subscribers see how investment products are categorized in GIMD. The investment strategies in GIMD are sorted into one of the 443 product categories which make up the 29 product groups, i.e. each product group is sub-divided into numerous product categories. For example an emerging markets strategy would go under one of the 24 different emerging markets product categories (dependent on the strategy). Each product group represents an investment region or asset class and is divided up into as many as 46 product categories, dependent on product group. Each of the 443 product categories is defined in terms of the geographical focus of the strategy, the types of assets that the strategy invests in and/or the type of benchmark that it aims to track or outperform. This document provides definitions and explanations for all these groups and categories. Pages three and four set out the product groups and the subsequent pages break down each product group into the respective product categories, in the same order as found on pages three and four. Investment managers enter their products into GIMD on a discretionary basis, however Mercer manager researchers may reclassify a strategy into another product category if they consider this to be appropriate (in many cases this is because Mercer has added a new, more appropriate product category to GIMD since the strategy entry was first created by the manager). The original manager-selected product group and category are also shown on the GIMD entry for each strategy, for reference. Any investment managers or MercerInsight users who believe that Mercer has classified a strategy incorrectly on GIMD are encouraged to contact Mercer to get the issue resolved. We encourage investment managers submitting entries for Global ex my home country equity and fixed income strategies to label them simply as Global rather than as Global ex UK, Global ex Australia etc., and to classify them under the relevant Global Equity or Global Fixed Income category, so that they don t have to maintain separate but very similar entries for each of these variants. The exceptions to this rule are World ex US and World ex Japan equity and fixed income strategies, which should be labelled as such and entered separately under the MERCER 1

5 appropriate World ex US or World ex Japan categories. These categories can all be found within the product groups labelled International. For investment managers requiring information on how to add products to GIMD, or use GIMD generally, please see the user guide under the link Download the User Guide (PDF) on the GIMD website homepage ( For investment managers with further questions, please contact your local helpdesk using the respective contact details found on the GIMD website. MercerInsight subscribers can find their local MercerInsight contact via the Contact Us section on MercerInsight ( MERCER 2

6 2 GIMD Performance Data Used In MercerInsight Performance Universes The product category tables set out in the document also show the base currency that Mercer prefers for that category to be entered in. For investment managers who wish to show their performance through MercerInsight, Mercer s quantitative analysis tool, we ask that they submit the performance in this specified currency and also comply with the requirements detailed on the page in GIMD where the performance track records are added. These track records will then be eligible for inclusion in MercerInsight. MercerInsight allows for quantitative analysis of institutional investment performance and contains more than 320 Mercer created performance universes for this purpose. The universes are constructed from the contained in GIMD, which contains more than 30,000 investment strategies with data from more than 5,900 investment managers. These universes cover a very wide range of asset classes and regions, from traditional bond and equities to more alternative asset classes such as currency and real estate. The universes are constructed so that users can perform comprehensive like for like analysis of an investment manager s fund against peers, the Mercer median or a relevant index over time. The outputs are available in either graphical or tabular format, are easy to interpret and can be used directly in any internal or external report, including requests for proposals (RFPs). MercerInsight is used internally by Mercer researchers and consultants to carry out quantitative analysis on investment products. It is also used externally by more than 400 subscribers; the external subscribers consist of two main user groups, institutional investors and investment managers. The institutional investor subscriber base includes pension funds, government agencies and multi-managers who have approximately US$6 trillion 1 globally of Mercer s and its affiliates assets under advisement and use the tool to help them monitor and select investment managers. The investment managers subscribing to MercerInsight use the system to compare and study their performance against competitors, medians and universes. For more information about MercerInsight please contact us via the MercerInsight website ( 1 As at December Includes the assets under advisement for clients who subscribe to MercerInsight and also receive access to it as part of an investment consulting advisory relationship. MERCER 3

7 3 Product Groups Product Group Asia Australia Canada Emerging Markets Engagement Services Equity Sectors Europe Factor Investing Hedge Funds/ Absolute Return Infrastructure Insurance Linked Strategies International Equity International Fixed International Multi-Asset Japan Natural Resources New Zealand Alternatives All Asian strategies other than those that fit the definitions for Japan, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives All Australian strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives All Canadian strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives All global, regional or single country emerging markets strategies other than those that fit the definitions for Asia, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Voting, engagement and stewardship services across public equities and bonds All equity strategies that focus on a single industry sector or narrow group of industry sectors All European strategies other than those that fit the definitions for United Kingdom, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Indices which aim to get exposure to certain style factors, often by having a weighting scheme driven by something other than market cap All Hedge Fund/Absolute Return strategies (other than 130/30-type equity) All listed equity, (direct) unlisted equity and fund-of-fund strategies Strategies which provide insurance cover and/or invest in securities and derivatives which are linked to insurance risks (e.g. natural disasters) All global/international equity strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives All global/international fixed income strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Debt or Alternatives All global/international multi-asset strategies other than those that fit the definitions for Hedge Funds/Absolute Return or Alternatives All Japan strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Commodity future strategies and illiquid (private equity style) opportunities with a natural resources theme including mining, farmland and timberland etc. All New Zealand strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives All alternatives strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity or Real Estate MERCER 4

8 Product Group Passive Passively Managed ETF Private Debt Private Equity Real Estate Strategies for Insurers United Kingdom United Kingdom DC US Equity US Fixed Income US Portfolio which aims to replicate a particular market index or benchmark fund and does not attempt to actively manage the portfolio All investment funds traded on stock exchanges. These funds generally track an index, although there are actively managed ETFs available All private debt, including illiquid senior debt, mezzanine debt but excluding real estate debt strategies All private equity offerings, including both Funds of Funds and directly invested funds All real estate offerings, including both those that invest directly in real estate or real estate funds and those that invest in real estate securities Customized insurance strategies specifically run for insurance policy monies. These strategies will have unique investment, business and regulatory constraints All UK strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Products designed for use by UK Defined Contribution pension schemes All US equity strategies other than those that fit the definition for Hedge Funds/Absolute Return All US fixed income strategies other than those that fit the definition for Hedge Funds/Absolute Return All US strategies other than those that fit the definitions for US Equity, US Fixed Income, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives MERCER 5

9 Asia Product Group ASEAN Equity Asia ex Japan Equity Asian Bonds Asia/Pacific Small Cap Equity China A Shares China Bonds (offshore) China Bonds (onshore) China Enterprise Annuity China Equity (offshore) Greater China Equity HK ORSO Hong Kong & China Equities Hong Kong Balanced Hong Kong Dollar Bond Hong Kong Equity Indian Bonds Indian Cash Long only ASEAN (Association for South East Asia Nations) equity strategies that aim to outperform an ASEAN equity index Long only Asia/Far East ex Japan equity strategies that aim to outperform an Asia/Far East ex Japan equity index (ex Aus/NZ) Long only Asian fixed income strategies that aim to outperform an Asian fixed income index Long only Asia/Pacific ex Japan small cap equity strategies that aim to outperform an Asia/Pacific ex Japan small cap equity index Long only China equity strategies that aim to outperform a China equity index Long only active and passive China fixed income strategies that invest in RMB-denominated debt securities which are issued outside Mainland China and aim to track or outperform a China offshore fixed income index Long only active and passive China fixed income strategies that invest in RMB-denominated debt securities which are issued within Mainland China and aim to track or outperform a China onshore fixed income index Long only balanced strategy with a mix of asset classes including China A share equity and fixed income products. The strategy could have an absolute return objective or aim to outperform any customized benchmarks Long only China equity strategies that aim to outperform a China equity index, and structured in the form of an offshore fund Long only Greater China equity strategies that aim to outperform a Greater China equity index Long only Hong Kong balanced strategies that aim to outperform a mix of equity, fixed income indices or a cash benchmark Long only Hong Kong and China equity strategies that aim to outperform a Hong Kong and China equity index (effectively Greater China ex Taiwan equity strategies) Long only Hong Kong balanced strategies that aim to outperform a mix of equity and fixed income indices Long only active and passive Hong Kong fixed income strategies that aim to track or outperform a Hong Kong fixed income index Long only Hong Kong equity strategies that aim to outperform a Hong Kong equity index Long only active and passive Indian fixed income strategies that aim to track or outperform an Indian fixed income index Long only active and passive Indian fixed income strategies that aim to generate optimal returns consistent with moderate levels of risk and high liquidity CNY HKD HKD HKD HKD MERCER 6

10 Indian Equity Indonesian Bonds Indonesian Equity Korea Equity Korean Bonds Malaysian Bonds Malaysian Equity Pacific Basin ex Japan Equity Pacific Basin inc Japan Equity Philippines Bonds Philippines Equity Singapore Bond Singapore Equity Taiwan Bonds Taiwan Equity Thailand Bonds Thailand Equity Long only Indian equity strategies that aim to outperform an Indian equity index Long only active and passive Indonesian fixed income strategies that aim to track or outperform an Indonesia fixed income index Long only Indonesian equity strategies that aim to outperform an Indonesian equity index Long only Korean equity strategies that aim to outperform a Korea equity index Long only active and passive Korean fixed income strategies that aim to track or outperform a Korean fixed income index Long only active Malaysian fixed income strategies that aim to outperform a Malaysia fixed income index Long only Malaysian equity strategies that aim to outperform a Malaysia equity index All other Asian strategies other than those that fit the definitions for Emerging Markets, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Long only active Pacific Basin ex Japan equity strategies that aim to outperform a Pacific Basin ex Japan equity index (inc Aus/NZ) Long only active Pacific Basin including Japan equity strategies that aim to outperform a Pacific Basin including Japan equity index Long only active and passive Philippines fixed income strategies that aim to track or outperform a Philippines fixed income index Long only Philippines equity strategies that aim to outperform a Philippines equity index Long only active and passive Singapore fixed income strategies that aim to track or outperform a Singapore fixed income index Long only Singapore equity strategies that aim to outperform a Singapore equity index Long only active and passive Taiwan fixed income strategies that aim to track or outperform a Taiwan fixed income index Long only Taiwan equity strategies that aim to outperform a Taiwan equity index Long only active and passive Thailand fixed income strategies that aim to track or outperform a Thai fixed income index Long only Thailand equity strategies that aim to outperform a Thai equity index MYR MYR SGD SGD MERCER 7

11 Australia Product Group Absolute Return Fixed Income Capital Stable Cash Credit Diversified Fixed Income Enhanced Index Fixed Income Equity Equity (Small Cap) Equity (Socially Responsible) Equity (Targeted Volatility) Fixed Income Inflation Linked Bonds Multi-Sector Balanced Multi-Sector Growth Short Duration Credit Fixed income strategies targeting cash plus 1-3% pa through the use of multiple alpha levers. These strategies will typically have a focus on managing downside risk Multi-sector strategies typically consisting of 30% growth assets (equities and property) and 70% defensive assets (fixed income and cash) Any cash-based or enhanced cash strategies seeking to add less than 1% per annum to the benchmark return Strategies benchmarked to an Australian non-government credit index predominantly investing in investment grade and non-investment grade debt securities Fixed income strategies with a combination of Australian and non- Australian investments that are managed to a hybrid domestic/foreign benchmark Fixed income strategies benchmarked to an Australian broad fixed income index seeking to add value with tracking error not more that 0.25% Long only and 130/30-type Australian equity strategies that aim to outperform a large cap or all cap Australian equity index Long only Australian equity strategies investing in stocks outside the S&P/ASX 100 Index but typically in the S&P/ASX 300 and S&P/ASX Small Ordinaries Indices Long only and 130/30-type Australian equity strategies that are tilted towards socially responsible stocks in some way and aim to outperform a large cap or all cap Australian equity index Australian equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark Fixed income strategies benchmarked to an Australian broad fixed income index Fixed income strategies invested predominantly in inflation linked assets and benchmarked to an Australian inflation linked fixed income index Multi-sector strategies typically consisting of 70% growth assets (equities and property) and 30% defensive assets (fixed income and cash) Multi-sector strategies typically consisting of 85% growth assets (equities and property) and 15% defensive assets (fixed income and cash) All other Australian strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Strategies targeting cash plus 2-4% pa through investment in predominantly credit securities. These strategies will typically have a low level of interest rate risk MERCER 8

12 Canada Product Group Balanced/Multi-Asset Target Date Target Risk Domestic Balanced Equity (Core) Equity (Growth Biased) Equity (Income Oriented) Equity (Small Cap) Equity (SMID Cap) Equity (Socially Responsible) Equity (Targeted Volatility) Long only strategies that invest in a mixture of primarily Canadian equity, fixed income and other assets to form a balanced portfolio Target date funds are marketed as series of funds with different maturity dates. Within a series, longer dated funds typically have a higher allocation to equities and a lower allocation to fixed income assets, and shorter dated funds typically have the opposite allocations. The asset mix of each fund is dynamically adjusted to reduce risk (equity exposure) in favour of more fixed income exposure as the time horizon to maturity of the fund shortens Target risk funds are typically marketed as series of 3 to 5 balanced funds, each with a targeted risk profile (e.g. conservative, moderate and aggressive funds). Each fund is regularly re-balanced to its target asset mix, so the equity and fixed income content (i.e. risk level) of each fund remains largely fixed Balanced strategies that invest only in Canadian equities and Canadian fixed income and that aim to outperform a composite equity/ fixed income benchmark Long only or long biased (130/30 type) large cap or all cap pure Canadian equity strategies, other than those that tend to have either a persistent growth bias or a value bias, that aim to outperform the S&P/TSX Composite or equivalent. Excludes strategies with non-canadian exposure that are included in the Total Equity category Long only or long biased (130/30 type) large cap or all cap pure Canadian equity strategies, that tend to have a persistent growth bias, that aim to outperform the S&P/TSX Composite or equivalent. Excludes strategies with non-canadian exposure that are included in the Total Equity category Long only or long biased (130/30 type) large cap or all cap pure Canadian equity strategies, that focus on a high dividend/high income approach, that aim to outperform the S&P/TSX Composite or equivalent. Excludes strategies with non-canadian exposure that are included in the Total Equity category Long only or long biased (130/30 type) small cap Canadian equity strategies that aim to outperform the S&P/TSX Small Cap index or equivalent Long only or long biased (130/30 type) small/mid cap Canadian equity strategies that aim to outperform the S&P/TSX Completion index, S&P/TSX Small Cap index or equivalent Long only or 130/30-type Canadian equity strategies that aim to invest in a socially responsible manner and to outperform a Canadian equity index (either a specialist SRI index or a mainstream Canadian index) Canadian equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark MERCER 9

13 Equity (Value Biased) Fixed Income (Core Plus Long) Fixed Income (Core Plus Universe) Fixed Income (Credit) Fixed Income (High Yield) Fixed Income (LDI) Fixed Income (Long-Term) Fixed Income () Fixed Income (Real-Return) Fixed Income (Short-Term) Fixed Income (Socially Responsible) Fixed Income (Universe) Money Market Long only or long biased (130/30 type) large cap or all cap pure Canadian equity strategies, that tend to have a persistent value bias, that aim to outperform the S&P/TSX Composite or equivalent. Excludes strategies with non-canadian exposure that are included in the Total Equity category Long only Canadian fixed income strategies with a long duration that invest in both core investment grade issues and opportunistically in non- Canadian debt, including emerging market and high yield debt and aim to outperform a Canadian long term bond index Long only Canadian fixed income strategies that invest in both core investment grade issues and opportunistically in non-canadian debt, including emerging market and high yield debt and aim to outperform a broad Canadian market index Long only Canadian fixed income strategies that invest predominately in corporate debt which can reasonably be benchmarked against a creditspecific Canadian bond index Long only Canadian fixed income strategies that invest a significant portion of assets in below-investment grade debt including US high yield debt and aim to outperform a corporate/high yield specific bond index Canadian strategies which focus on hedging risk relative to a specific pension fund liability curve using a variety of cash bonds and/or derivative instruments rather than aiming to outperform a published index or generate absolute returns Long only Canadian fixed income strategies that invest predominately in investment grade domestic debt with a long duration and aim to outperform a Canadian long term bond index All other Canadian fixed income strategies that do not satisfy any other classification Long only Canadian fixed income strategies that invest predominantly in Canadian Real Return bonds and aim to outperform a Canadian inflation linked index Long only Canadian fixed income strategies that invest in predominantly investment grade domestic debt with a short term duration and aim to outperform a Canadian short-term bond market index Long only Canadian fixed income strategies that are tilted towards socially responsible investments in some way and aim to outperform a Canadian bond market index Long only Canadian fixed income strategies that invest primarily in investment grade issues denominated in Canadian dollars and aim to outperform a broad Canadian market index Canadian fixed income strategies with a duration of less than one year that aim to outperform the Scotia Capital 91-Day T-Bill index or equivalent Mortgage Strategies that invest primarily in Canadian mortgages MERCER 10

14 Total Equity All other Canadian strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Long only or long biased (130/30 type) strategies that invest primarily in Canadian equities, but which also invest in non-canadian equities, and that aim to outperform the S&P/TSX Composite or equivalent, or a blended Canadian/foreign equity index Emerging Markets Product Group African Equity Asian Emerging Markets Equity Brazilian Equity BRIC Equity Eastern European Equity EMEA Equity Emerging Markets Balanced Emerging Markets Debt Hard Currency Emerging Markets Debt Blend Emerging Markets Debt Corporate Emerging Markets Debt Local Currency Emerging Markets Debt Long only or 130/30 type African equity strategies that aim to outperform an African index Long only or 130/30 Asian emerging markets equity strategies that aim to outperform a Asian Emerging Market equity index Long only or 130/30-type Brazilian emerging markets equity strategies that aim to outperform a Brazilian equity index Long only or 130/30-type Brazil, Russia, India and China emerging markets equity strategies that aim to outperform a BRIC equity index Long only or 130/30-type Eastern European emerging markets equity strategies that aim to outperform an Eastern European equity index Long only or 130/30-type Europe, Middle East and Africa emerging markets equity strategies that aim to outperform an EMEA equity index A blend of both emerging market debt and emerging market equity strategies Long only emerging market debt strategies that focus on hard currency denominated debt Long only emerging market debt strategies that focus on a strategic blend of hard and local currency denominated debt Long only emerging market debt strategies that focus on corporate debt Long only emerging market debt strategies that focus on local-currency denominated debt EMD strategies that do not fit into any of the existing EMD categories. Examples include Inflation-linked EMD and Local Currency EMD Corporates / / / / MERCER 11

15 Emerging Markets Debt Total Return Emerging Markets Equity Emerging Markets Equity Consumer Demand Emerging Markets Small Cap Equity Emerging Markets Equity Sustainability Themes Emerging Markets Equity Targeted Volatility Global Frontier Markets Latin American Equity MENA Equity Russian Equity South African Equity Long only or long/short strategies that are invested in an unconstrained blend of local or hard currency denominated sovereigns and/or corporates. The gross notional exposure of portfolios typically does not surpass 150%, and short positions are typically used to hedge Long only or 130/30-type global emerging markets equity strategies that aim to outperform a global emerging markets equity index Equity strategies focused on capturing the tailwinds associated with consumption growth in emerging markets. These strategies are likely to have a significant bias to the consumer sectors, and can have substantial exposure to companies listed in developed markets that generate a meaningful proportion of revenues or profits in emerging markets Long only or 130/30-type emerging markets small cap equity strategies that aim to outperform a global emerging market small cap equity index Long only or 130/30-type emerging market equity strategies that focus on sustainability themes (e.g. alternative energy) and aim to outperform an emerging markets equity index Emerging Market equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark Long only or 130/30-type emerging markets equity strategies that focus on global frontier markets and aim to outperform a relevant frontier emerging markets equity index Long only or 130/30-type Latin American emerging markets equity strategies that aim to outperform a Latin American emerging markets equity index Long only or 130/30-type Middle East and North Africa emerging markets equity strategies that aim to outperform a MENA emerging markets equity index All other global, regional or single country non-asian emerging markets strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Long only or 130/30-type Russian equity strategies that aim to outperform a Russian broad market equity index Long only or 130/30-type South African equity strategies that aim to outperform a South African broad market equity index // // // ZAR Engagement Services Product Group Overlay Voting and/or engagement across asset classes including Equity/Fixed Income/Real Estate/collaborative initiatives MERCER 12

16 Equity Sectors Product Group Cyclical Consumer Goods Financials Gold & Precious Metals Health/Biotech Industrials Natural Resources Non-Cyclical Consumer Goods Technology Telecommunication Services Utilities Long only and long/short equity strategies focusing on stocks of companies engaged in the production of automobiles, household goods, textiles and clothing and luxury goods. Also includes service industries such as hotel, casino, leisure, media and retail operations and services on a regional or global basis. These companies would be expected to be the most sensitive to economic cycles Long only and long/short equity strategies focusing on financial stocks on a regional or global basis. This includes banks, life, non life and other insurance companies, companies offering financial services and mortgage finance, and real estate investment trusts or real estate service companies Long only and long/short equity strategies focusing on gold and other precious metals stocks such as silver and platinum, and related products; including companies that mine or finance these on a regional or global basis Long only and long/short equity strategies focusing on stocks of companies involved in the manufacture or distribution of healthcare equipment or supplies; owners or operators of healthcare services or facilities and companies providing healthcare technology. Also companies engaged in the research, development or production of biotechnology and pharmaceutical substances on a regional or global basis Long only and long/short equity strategies focusing on stocks involved with the research, development, manufacture, distribution, supply, or sale of materials, equipment, products or services related to cyclical and natural resources industries on a regional or global basis Long only and long/short equity strategies focusing on companies involved in exploration, extraction, refining, production, distribution and/or supply of minerals (excluding precious metals) or mineral oil and gas, and providers of services for oil and natural gas exploration and production on a regional or global basis Long only and long/short equity strategies focusing on stocks of companies engaged in fishing and farming operations, manufacturers, distributors and retailers of food and drink, tobacco and personal products on a regional or global basis. This sector would be expected to be less affected by economic cycles Long only and long/short equity strategies focusing on technology stocks on a regional or global basis Long only and long/short equity strategies focusing on stocks involved with the development, manufacture or sale of telecommunications services on a regional or global basis Long only and long/short equity strategies focusing on stocks involved with the electricity, water, or gas distribution, or that operate as independent power producers on a regional or global basis MERCER 13

17 Europe Product Group Cash Enhanced (IBOR Plus net) Cash Pure (Sub-IBOR net) Denmark Equity European cash strategies with a benchmark of IBOR-plus European cash strategies with a sub-ibor benchmark Long only or 130/30-type Danish equity strategies that aim to outperform a Danish equity index Denmark Fixed Income Long only Danish fixed income strategies DKK Euro Convertibles Europe ex UK Equity Europe ex UK Small Cap Equity Europe Fixed Bank Loans Europe Fixed Buy and Maintain Credit Europe Fixed (Govt) Europe Fixed (Govt & Non-Govt) Europe Fixed (High Yield) Europe Fixed (Non-Govt) Europe inc UK Equity Europe inc UK Small Cap Equity Europe Inflation-Linked Bonds Europe Senior ABS/MBS Eurozone Equity Long only Eurozone fixed income strategies that invest primarily in Eurozone convertibles Long only or 130/30-type Europe ex UK equity strategies that aim to outperform a Europe ex UK equity index Long only or 130/30-type Europe ex UK small cap equity strategies that aim to outperform a Europe ex UK small cap equity index Long only European fixed income strategies that invest predominantly in floating rate senior secured/leveraged loans and aim to outperform a European leveraged loan index Long only European fixed income strategies that seek to capture the credit premium and illiquidity premium of the European credit markets, focusing on fundamentals predominantly within investment grade credit with minimal turnover, with a non-traditional benchmark approach Long only European fixed income strategies that invest primarily in European govt bonds Long only European fixed income strategies that invest in a mixture of European government and non-government bonds Long only European fixed income strategies that invest primarily in high yielding European bonds Long only European fixed income strategies that invest primarily in European non-government bonds Long only or 130/30-type Europe inc UK equity strategies that aim to outperform a Europe inc UK equity index Long only or 130/30-type Europe inc UK small cap equity strategies that aim to outperform a Europe inc UK small cap equity index Long only European bond strategies that invest primarily in inflation-linked European bonds Long only European fixed income strategies that invest predominantly in fixed and floating rate secured credit and aim to outperform a cash benchmark Long only or 130/30-type Eurozone equity strategies that aim to outperform a Eurozone equity index DKK // // MERCER 14

18 Eurozone Small Cap Equity Finland Equity German Balanced/ Multi-Asset German Equity Irish Balanced/ Multi-Asset Liability Driven Investment (LDI) Pooled Liability Driven Investment (LDI) Segregated Nordic Equity Norway DC Funds Norway Equity Long only or 130/30-type Eurozone small cap equity strategies that aim to outperform a Eurozone small cap equity index Long only or 130/30-type Finnish equity strategies that aim to outperform a Finnish equity index Long only strategies that invest in a mixture of equity, fixed income and other German assets to form a balanced portfolio Long only or 130/30-type German equity strategies that aim to outperform a German equity index Long only strategies that invest in a mixture of Irish equity, Irish fixed income and other assets to form a balanced portfolio Pooled strategies which focus on risk relative to pension fund liabilities rather than in absolute terms and which strive to hedge this risk using a variety of derivative instruments Segregated strategies which focus on risk relative to pension fund liabilities rather than in absolute terms and which strive to hedge this risk using a variety of derivative instruments Long only or 130/30-type Nordic equity strategies that aim to outperform a Nordic equity index Long only strategies that invest in a mixture of domestic and international equity, fixed income and other assets to form balanced Defined Contribution portfolios Long only or 130/30-type Norwegian equity strategies that aim to outperform a Norwegian equity index Norway Fixed Income Long only Norwegian fixed income strategies NOK Portuguese Balanced/ Multi-Asset Sweden Equity All other regional or single country European strategies other than those that fit the definitions for Emerging Markets, Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Long only strategies that invest in a mixture of Portuguese equity, Portuguese fixed income and other assets to form a balanced portfolio Long only or 130/30-type Swedish equity strategies that aim to outperform a Swedish equity index Sweden Fixed Income Long only Swedish fixed income strategies SEK Sweden Index-Linked Fixed Income Long only Swedish bond strategies that invest primarily in inflation-linked Swedish bonds Sweden Money Market Swedish fixed income strategies with a duration of less than one SEK Sweden Small Cap Equity Swiss Balanced/ Multi-Asset Long only or 130/30-type Swedish small cap equity strategies that aim to outperform a Swedish small cap equity index Long only strategies that invest in a mixture of Swiss equity, Swiss fixed income and other assets to form a balanced portfolio Swiss Cash Swiss cash strategies CHF NOK NOK SEK SEK SEK CHF MERCER 15

19 Swiss Equity Long only or 130/30-type Swiss equity strategies that aim to outperform a Swiss equity index Swiss Fixed Income Long only Swiss fixed income strategies CHF CHF Factor Investing Product Group Equity Low Volatility Equity Momentum Equity Multifactor Equity Equity Quality Equity Size Equity Value Factor indices with the aim of achieving global equity exposure to low volatility factors Factor indices with the aim of achieving global equity exposure to momentum factors Factor indices with the aim of achieving global equity exposure to multiple factors Factor indices with the aim of achieving global equity exposure to factors not defined elsewhere in the Factor Investing product group Factor indices with the aim of achieving global equity exposure to quality factors Factor indices with the aim of achieving global equity exposure to size (small cap) factors Factor indices with the aim of achieving global equity exposure to value factors Hedge Funds/Absolute Return Product Group Active Currency Alternative Risk Premia Commodities Long- Short Active currency strategies (i.e. other than those that focus primarily on risk reduction) Strategies that are aiming to capture non-traditional risk premia, typically extracted through systematically taking long/short positions within various asset classes. Sometimes also called alternative beta, alternative risk premia include style premia (such as value, momentum and carry) through to the hedge fund risk premia (e.g. merger arbitrage). Hedge fund replication strategies are included in this definition Active long short commodities strategies See note (a) See note (a) See note (a) Credit Long/Short Long/short and opportunistic credit strategies See note (a) MERCER 16

20 Distressed Debt Event Driven Fundamental Macro Fund of Hedge Funds Commodities Fund of Hedge Funds Event Driven and Credit Fund of Hedge Funds Long-Short Equity Fund of Hedge Funds Macro and Managed Futures Fund of Hedge Funds Multistrategy Fund of Hedge Funds Liquid Alternatives Equity Hedge Liquid Alternatives Event Driven and Credit Liquid Alternatives FoF Liquid Alternatives Multi-Asset Liquid Alternatives Multi-Strategy Liquid Alternatives Liquid Alternatives Trading Managed Futures Market Neutral Equity Long only and long short strategies that invest in the securities of companies or government entities which are already in default, under bankruptcy protection, or in distress and heading toward such a condition Strategies investing in securities that are impacted by certain company specific events or catalysts Broad global macro (and global tactical asset allocation) strategies (other than those that focus solely on currencies or commodities) that seek to add value predominately through fundamental analysis (rather than technical analysis of historic price series - see Managed Futures). May implement views systematically or on a discretionary basis Multimanager fund of hedge fund strategies that invest in Commodity focused hedge funds Multimanager fund of hedge fund strategies that invest in Event Driven and Credit strategy hedge funds Multimanager fund of hedge fund strategies that invest in Long-Short Equity strategy hedge funds Multimanager fund of hedge fund strategies that invest in Global Macro and Managed Futures strategy hedge funds Multimanager fund of hedge fund strategies that invest in multiple types of hedge fund strategy Multimanager fund of hedge fund strategies that are not covered by other Fund of Hedge Funds definitions Liquid long short equity strategies OR liquid equity market neutral strategies Liquid strategies investing in securities that are impacted by certain company specific events or catalysts OR Liquid opportunistic strategies investing in a broad range of debt instruments using a variety of methods Liquid Multimanager fund of hedge fund strategies Liquid multi-asset strategies with absolute return objectives; including diversified growth funds, idiosyncratic multi-asset strategies etc. Liquid single manager multistrategy hedge fund categories All liquid hedge fund or absolute return strategies that do not fit into any of the other categories Liquid trading strategies, including currency, fundamental macro, macro rates and volatility arbitrage Managed futures strategies (also sometime known as CTAs) that seek to add value predominately through technical analysis of historic price series, rather than fundamental analysis Long/short equity strategies that aim to keep their net equity market exposure close to zero on average over the long term See note (a) See note (a) See note (a) See note (a) See note (a) See note (a) See note (a) See note (a) See note (a) // // // // // // // See note (a) See note (a) MERCER 17

21 Long Short Equity Long/short equity strategies other than market neutral strategies See note (a) Multistrategy Tail Risk Hedging Strategies Single manager multistrategy hedge funds that invest opportunistically in a number of different hedge fund strategies All hedge fund or absolute return strategies that do not fit into any of the other categories Strategies that adopt positions within a portfolio that are designed to protect against downward market moves See note (a) See note (a) See note (a) Infrastructure Product Group Infrastructure Australasia Infrastructure Debt Infrastructure Emerging Markets Infrastructure Europe Infrastructure Funds of Funds Infrastructure Global Infrastructure Listed Securities Infrastructure North America Infrastructure Power/Energy Infrastructure funds that primarily invest directly into assets located in Australia and/or New Zealand Strategies providing capital, largely structured as loans, to borrowers involved in Infrastructure projects Infrastructure funds that primarily invest directly into assets located in Asia, Central and Eastern Europe, MENA and/or Latin America Infrastructure funds that primarily invest directly into assets located in Europe (including those focused solely on the UK) Infrastructure funds that primarily invest in other, third-party infrastructure funds (either listed or unlisted) Infrastructure funds that invest directly into assets on a global basis, primarily in developed regions (Europe, North America, Australasia) Infrastructure funds that primarily invest in listed equities, either on a global or regional basis and either on an active or passive basis Infrastructure funds that primarily invest directly into assets located in the US and/or Canada Infrastructure funds that primarily invest directly into assets in the traditional or renewable energy sectors Insurance Linked Strategies Product Group Catastrophe Insurance Linked Strategies where the predominant insurance risks are linked to natural and man-made catastrophes MERCER 18

22 Life Insurance Linked Strategies where the predominant insurance risks are linked to life risks such mortality or longevity Insurance Linked Strategies International Equity Product Group Flexible Equity Global Equity Core Global Equity Growth Global Equity Small Cap Global Equity SRI Global Equity Sustainability themes Global Equity Sustainability themes Clean Energy Global Equity Sustainability themes Water Global Equity Targeted Volatility Global Equity Value Long only equity strategies that aim to outperform cash-based, inflationbased or absolute return-based benchmarks as opposed to equity market indices Long only or 130/30-type global equity strategies, other than those that tend to have either a growth bias or a value bias, that aim to outperform a global equity index Long only or 130/30-type global equity strategies that tend to have a growth bias, and aim to outperform a global equity broad market or growth style index Long only or 130/30-type global small cap equity strategies that aim to outperform a global small cap equity index Long only or 130/30-type global equity strategies that are tilted towards socially responsible stocks in some way and aim to outperform a global equity index Long only or 130/30-type global equity strategies that focus on broad sustainability themes (such as climate change, demographics, environment) and aim to outperform a global equity index Long only or 130/30-type global equity strategies that focus on sustainability themes in Clean energy and aim to outperform a global equity index Long only or 130/30-type global equity strategies that focus on sustainability themes in Water and aim to outperform a global equity index Global equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark Long only or 130/30-type global equity strategies that tend to have a value bias, and aim to outperform a global equity broad market or value style index All other global or international equity strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) // /NZD (see note (b)) MERCER 19

23 World ex Japan Equity Core World ex Japan Equity Growth World ex Japan Equity Targeted Volatility World ex Japan Equity Value World ex US/EAFE Equity Core World ex US/EAFE Equity Growth World ex US/EAFE Equity SRI World ex US/EAFE Equity Value World ex US/EAFE Equity Small Cap World ex US/EAFE Equity Targeted Volatility Long only or 130/30-type world ex Japan equity strategies, other than those that tend to have either a growth bias or a value bias, that aim to outperform a world ex Japan equity index Long only or 130/30-type world ex Japan equity strategies that tend to have a growth bias and aim to outperform a world ex Japan broad market or growth style index Global ex-japan equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark Long only or 130/30-type world ex Japan equity strategies that tend to have a value bias and aim to outperform a world ex Japan broad market or value style index Long only or 130/30-type world ex US or EAFE equity strategies, other than those that tend to have either a growth bias or a value bias, that aim to outperform a world ex US or EAFE equity index Long only or 130/30-type world ex US or EAFE equity strategies that tend to have a growth bias, and aim to outperform a world ex US or EAFE equity broad market or growth style index Long only or 130/30-type world ex US or EAFE equity strategies that are tilted towards socially responsible stocks in some way and aim to outperform a world ex US or EAFE equity index Long only or 130/30-type world ex US or EAFE equity strategies that tend to have a value bias, and aim to outperform a world ex US or EAFE equity broad market or value style index Long only or 130/30-type world ex US small cap equity strategies that aim to outperform a world ex US small cap equity index Global equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark JPY JPY JPY/ JPY / / / / / / International Fixed Product Group Absolute Return Global or regionally based products designed to add value in all market environments. These funds main goal is capital preservation and will attempt to add value through a diversified array of fixed income alpha sources / MERCER 20

24 Global Bank Loans Global Buy and Maintain Credit Global Convertibles Global Credit Global Fixed Income Broad Market/ Aggregate Global Fixed Income Sovereign Global Fixed Income SRI Long only global fixed income strategies that invest predominantly in floating rate senior secured/leveraged loans and aim to outperform a global leveraged loan index Long only global fixed income strategies that seek to capture the credit premium and illiquidity premium of the global credit markets, focusing on fundamentals predominantly within investment grade credit with minimal turnover, with a non-traditional benchmark approach Global convertibles strategies with no permanent country or regional biases Global investment grade credit strategies that aim to outperform a global investment grade credit benchmark index Global fixed income strategies that aim to outperform a broad market/aggregate global fixed income index Global fixed income strategies that aim to outperform a sovereign only or broad market/aggregate global fixed income index Global fixed income strategies that are tilted towards socially responsible investments in some way and aim to outperform a broad market/aggregate global fixed income index / See note (c) See note (c) See note (c) See note (c) Global High Yield Long only global high yield (sub-investment grade) credit strategies Global Inflation-Linked Bonds Multi-Asset Credit Secure Financing Multi-Asset Global inflation-linked bond strategies Multi-Asset Credit funds are mandates which will add value by rotating capital across various different fixed income asset classes and through issue selection. Asset allocation will generally focus on the higher yielding areas of the fixed income market, but some may also look to invest in investment grade credit and sovereign debt. Asset classes normally associated with these funds, but not exclusively will be: high yield, leveraged loans, non-agency RMBS, ABS, convertibles and EMD. They may also have a small allocation to stressed/distressed debt. We do not expect managers to focus on a benchmark but will look to deliver a return of cash + 4% to 6% over a full market cycle. However, these funds will have a high correlation to credit spreads and will underperform cash in a negative spread environment All other global or international fixed income strategies other than those that fit one of the definitions for Hedge Funds/Absolute Return Strategies that allocate capital across a range of debt securities that have a form of collateral backing or secured cashflow. These will include asset classes such as Asset Backed Securities including Mortgage Backed Securities, Collateralized Loan Obligations, Real Estate and Infrastructure Debt, Bank Loans, Direct Lending, Private Credit, Supply Chain Finance, Regulatory Capital, etc See note (c) MERCER 21

25 Secure Financing Single-Asset Unconstrained Bond World ex Japan Fixed Income World ex US Fixed Income Strategies with exposure to collateral backing or secured cashflow that maybe considered niche and do not have individually specified GIMD product categories; Direct Lending/ Private Credit, Supply Chain Finance, Regulatory Capital etc Global or regionally based products that are benchmark agnostic. These products can be defined as unconstrained bond funds and should deliver bond like returns with lower volatility. They will usually have a passive exposure to spread beta World ex Japan fixed income strategies that aim to outperform a sovereign only or broad market/aggregate world ex Japan fixed income index World ex US fixed income strategies that aim to outperform a sovereign only or broad market/aggregate world ex US fixed income index JPY / International Multi-Asset Product Group Core Multi-Asset Diversified Inflation Multi-asset strategies which can invest across equities, fixed income and alternative assets, but where the dominant drivers of return will be from traditional market beta. These strategies will typically hold a core of direct stock and bond exposures (including via in-house and/or third party funds) rather than derivatives-based exposures, although derivatives may be used to vary the asset allocation and to capture some specific trades. The overall asset allocation will likely underpinned by a strategic benchmark (such as 60% equity; 40% bonds) or a long-term asset allocation that results in some consistency to the traditional beta exposure. Exotic beta (such as emerging market debt and high yield bonds) or exposure to listed/liquid alternatives (including listed hedge funds, REITs etc.) are other possible sources of return. Overall the strategies are likely to be considered suitable as a core defined contribution fund holding or low governance all-in-one growth portfolio solution Strategies that invest in liquid real assets and other inflation sensitive asset classes, with the objective of providing diversified exposure to the potential drivers of inflation /// //YEN // MERCER 22

26 Idiosyncratic Multi-Asset Risk Parity Multi-asset strategies which can invest across and within a diversified portfolio of equities, fixed income and/or alternative investment strategies. These strategies will have a long-bias and traditional beta exposures a key source of returns. However, more active and nondirectional exposures will also be significant components of the strategy and returns are expected to be more absolute return in nature. The will generally be less correlated with equity market movements than Core Diversified Growth/Global Balanced strategies and make greater use of tactical or dynamic allocation across broad markets and idiosyncratic trade ideas (single stock trade ideas, relative value opportunities etc.). The overall portfolio construction might make significant use of indirect hedging and/or derivative overlays to manage the downside risk of the portfolio. With traditional beta being a weaker predictor of fund returns, these strategies are likely to be considered as a satellite to a Core Diversified Growth/Global Balanced strategies in a defined contribution context, or as a possible liquid diversifier within broader investment portfolios All other global or international multi-asset strategies other than those that fit the definitions for Hedge Funds/Absolute Return Strategies that provide a diversified exposure to traditional betas (and possibly alternative risk premia) based on the concept of risk parity. This includes strategies equally weighting asset classes as well as risk factors etc. Leverage is likely to be a key feature of the strategy. Strategies with tactical asset allocation overlays (or other similar alpha return drivers) should also be included where the risk parity underpin remains a key feature of the final portfolio // / // Japan Product Group Equity Fixed Income Japan Focussed Global Balanced Small Cap Equity Long only or 130/30-type Japan equity strategies that aim to outperform a large cap or broad market Japan equity index Fixed income strategies that invest primarily in Japan that aim to outperform a Japan fixed income index Balanced strategies that include Japan equity, Japan fixed income, global ex Japan equity and global ex Japan fixed income strategies as substrategies All other Japan strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Long only or 130/30-type Japan small cap equity strategies that aim to outperform a Japan small cap equity index //JPY JPY JPY JPY JPY MERCER 23

27 Natural Resources Product Group Commodities Active Long Energy and Mining Farmland Global/ Farmland US Private Markets Fund of Funds Timber Fund of Funds Timber Funds Global/ Active long only commodities strategies that aim to outperform a commodity index Strategies investing in physical energy/mining assets and closely related securities Strategies investing in physical agriculture/farmland and closely related securities globally or outside the US Strategies investing in physical agriculture/farmland and closely related securities in the US Natural Resources strategies that did not fit any of the other definitions Fund of fund strategies investing in natural resources, other than agriculture and timberland Fund of funds investing in close-ended timberland fund primaries and/or secondaries, co-investments or other similar investments. Not including portfolios of timberland REITs Timber funds other than those that focus on US timber investments // Timber Funds US Timber funds that focus on US timber investments New Zealand Product Group Active NZ Equity Actively managed New Zealand equity funds with either no, or low, exposure to Australian stocks Cash New Zealand cash funds NZD Diversified Fixed Income Funds which have a mix of both New Zealand and non-nz fixed income exposure (weighting determined by the manager) Managed Funds Multi-asset class (both domestic and overseas) balanced funds NZD NZ Fixed Income Actively managed New Zealand fixed income funds NZD Trans-Tasman Equity All other New Zealand strategies other than those that fit the definitions for Hedge Funds/Absolute Return, Private Equity, Real Estate or Alternatives Actively managed New Zealand equity funds with material exposure to Australian stocks NZD NZD NZD NZD MERCER 24

28 Alternatives Product Group Impact Investing Strategies that seek to enhance social structure or environmental health as well as achieve financial returns All other alternatives strategies other than private equity strategies, real estate strategies and hedge fund/absolute return strategies Passive Product Group Alternatives Commodities Passive commodities strategies that aim to track a commodity index Alternatives Currency Currency strategies that are either passive hedging strategies or strategies with a primary focus on risk reduction rather than on value added Asia Equity Passive Asia equity strategies Australia Balanced/ Multi-Asset Australia Equity Australia Fixed Income Canada Balanced/ Multi-Asset Canada Equity Canada Fixed Income Long only strategies that invest in a mixture of equity, fixed income and other Australian assets to form a balanced portfolio Long only and 130/30-type Australian equity strategies that aim to track a large cap or all cap Australian equity index reasonably closely and/or to outperform it by a small margin Fixed income strategies seeking to match an Australian broad fixed income index Passive long only strategies that invest in a mixture of primarily Canadian equity, fixed income and other assets to form a balanced portfolio Long only or long biased (130/30 type) strategies that employ physical or synthetic replication of the S&P/TSX Composite or equivalent Strategies that employ full or stratified sampling methods to track the Scotia Capital Universe Bond or Long-Term Bond indices Emerging Markets Equity Passive emerging markets equity strategies Europe ex UK Equity Passive Europe ex UK equity strategies Europe inc UK Equity Passive Europe inc UK equity strategies Eurozone Equity Passive Eurozone equity strategies Eurozone Fixed Income Passive Eurozone fixed income strategies Global Equity Passive global equity strategies that aim to track a global equity index Global Fixed Income Passive global fixed income strategies that aim to track either a sovereign only global fixed income index or a broad market/aggregate global fixed income index See note (c) MERCER 25

29 Japan Equity Passive Japan equity strategies that aim to track a Japan equity index /JPY New Zealand Equity Passively managed New Zealand equity funds NZD Pacific Basin ex Japan Equity Pacific Basin inc Japan Equity Long only passive Pacific Basin ex Japan equity strategies that aim to track a Pacific Basin ex Japan equity index (inc Aus/NZ) Long only passive Pacific Basin inc Japan equity strategies that aim to track a Pacific Basin inc Japan equity index (inc Aus/NZ) Real Estate Securities Long only passive listed property/reit/real estate securities strategies / Singapore Fixed Income United Kingdom Balanced/Multi-Asset Fixed income strategies seeking to match a Singapore broad fixed income index Passive UK balanced/multi-asset strategies United Kingdom Equity Passive UK equity strategies United Kingdom Fixed Income US Equity All Cap Index Based US Equity Large Cap Index Based US Equity Mid Cap Index Based US Equity Small Cap Index Based US Fixed Income Index Based World ex US Equity Passive UK fixed income strategies Long only or 100% net exposure US equity strategies that aim to track a US broad market equity index reasonably closely and/or to outperform it by a small margin Long only or 100% net exposure US equity strategies that aim to track a US broad market or large cap equity index reasonably closely and/or to outperform it by a small margin Long only or 100% net exposure US equity strategies that aim to track a US mid cap equity index reasonably closely and/or to outperform it by a small margin Long only or 100% net exposure US equity strategies that aim to track a US small cap equity index reasonably closely and/or to outperform it by a small margin Long only US fixed income strategies that aim to track a broad US bond index reasonably closely and/or to outperform it by a small margin Passive world ex US or EAFE equity strategies that aim to track a world ex US or EAFE equity index SGD / / / / / Passively Managed ETF Product Group Non-Synthetic Bond Passively managed physically replicated exchange traded bond funds Non-Synthetic Equity - Physical Equity Passively managed physically replicated exchange traded equity funds - standard indices MERCER 26

30 Non-Synthetic Equity - Non-Synthetic Equity - REITs Passively managed physically replicated exchange traded equity funds - non-standard indices Passively managed physically replicated exchange traded equity funds - REITs. Synthetic Bond Passively managed synthetically replicated exchange traded bond funds Synthetic Equity Passively managed synthetically replicated exchange traded equity funds All other ETF strategies other than those that fit the definitions for passively managed physical equity, physical bond, synthetic equity or synthetic bond Private Debt Product Group European Mezzanine European Senior Debt/Direct Lending US Mezzanine US Senior Debt/Direct Lending European focused strategies that invest in securities classified between equity and senior debt in the capital structure. There is a bias to LBO financing; investments can be seen as private, direct financing or club deals. Strategies get typically accessed via longer-term/closed-ended investment vehicles European focused strategies that invest in debt being senior in the capital structure. There is a bias to LBO financing, but some strategies focus on a broader set of direct lending opportunities. Investments can be seen as private, direct financing or club deals. The loans are not widely syndicated and get not regularly traded on the secondary market (compared to bank loans). Strategies get typically accessed via longer-term/closed-ended investment vehicles or segregated accounts US focused strategies that invest in securities classified between equity and senior debt in the capital structure. There is a bias to LBO financing; investments can be seen as private, direct financing or club deals. Strategies get typically accessed via longer-term/closed-ended investment vehicles US focused strategies that invest in debt being senior in the capital structure. There is a bias to LBO financing, but some strategies focus on a broader set of direct lending opportunities. Investments can be seen as private, direct financing or club deals. The loans are not widely syndicated and get not regularly traded on the secondary market (compared to bank loans). Strategies get typically accessed via longer-term/closed-ended investment vehicles or segregated accounts Private corporate debt strategies with a regional focus outside US/Europe, global strategies, senior funds with mezzanine-like target returns due to a particular risk exposure (e.g. distressed, special situation, growth financing) / MERCER 27

31 Private Equity Product Group Directly Invested Asia Directly Invested Australia Directly Invested Emerging Markets Directly Invested Europe Directly Invested Global Directly Invested Japan Directly invested funds (as opposed to funds of funds) that invest primarily in Asian private equity deals, other than those that primarily focus on Japan Directly invested funds (as opposed to funds of funds) that invest primarily in Australian private equity deals Directly invested funds (as opposed to funds of funds) that invest primarily in emerging market private equity deals, other than those that primarily focus on Asia Directly invested funds (as opposed to funds of funds) that invest primarily in European private equity deals, other than those that primarily focus on the UK Directly invested funds (as opposed to funds of funds) that invest primarily in private equity deals on a global basis Directly invested funds (as opposed to funds of funds) that invest primarily in Japanese private equity deals / / Directly Invested All other directly invested funds (as opposed to funds of funds) Directly Invested UK Directly Invested US Buyouts Directly Invested US Co-Investment Directly Invested US Growth Directly Invested US Special Situations Directly Invested US Venture Funds of Funds Asia/Pacific Funds of Funds Australia Funds of Funds CleanTech Funds of Funds Europe Funds of Funds Global Directly invested funds (as opposed to funds of funds) that invest primarily in UK private equity deals Directly invested funds (as opposed to funds of funds) that invest primarily in US buyout equity deals Directly invested funds (as opposed to funds of funds) that invest primarily in US co-investment opportunities Directly invested funds (as opposed to funds of funds) that invest primarily in US growth opportunities Directly invested funds (as opposed to funds of funds) that invest primarily in US special situations Directly invested funds (as opposed to funds of funds) that invest primarily in US venture private equity deals Private equity funds of funds that invest primarily in Asia/Pacific-focused private equity funds Private equity funds of funds that invest primarily in Australia-focused private equity funds Private equity fund of funds that invest primarily in clean technologyfocused private equity funds Private equity funds of funds that invest primarily in European-focused private equity funds Private equity funds of funds that invest primarily in private equity funds on a global basis / MERCER 28

32 Funds of Funds All other private equity funds of funds Funds of Funds US Secondary Funds Private equity funds of funds that invest primarily in US-focused private equity funds Private equity funds that invest primarily in holdings in private equity funds that are purchased on the secondary market Real Estate Product Group Australia Australian Securities Real estate strategies that invest primarily in Australian real estate/property Long only Australian listed property/reit/real estate securities strategies that aim to outperform an Australian listed property index Canada Real estate strategies that invest primarily in Canadian real estate/property Fund of Funds Asia Asian Fund of Fund real estate/property strategies Fund of Funds Europe European Fund of Fund real estate/property strategies Fund of Funds Global Global Fund of Fund real estate/property strategies / Fund of Funds US US Fund of Fund real estate/property strategies Germany Real estate strategies that invest primarily in German real estate/property Global Global Securities Japan Real estate strategies that invest primarily in real estate/property on a global basis Long only global listed property/reit/real estate securities strategies Real estate strategies that invest primarily in Japanese real estate/property / / (see note (b)) Japanese Securities Long only Japanese listed property/reit/real estate securities strategies JPY New Zealand NZ Securities Real estate strategies that invest primarily in New Zealand real estate/property Long only New Zealand listed property/reit/real estate securities strategies All other real estate/property strategies Pan Asia Pan European Core Real estate strategies that invest primarily in Asian real estate/property, other than those that focus on Japan Strategies that invest in a diversified mixture of Europe real estate/property, and are marketed primarily to institutions Pan European HLV Real Estate Strategies that invest in European low risk characteristics JPY NZD NZD MERCER 29

33 Pan European Opportunistic Pan European Value Add Real Estate Debt UK/Europe Real Estate Debt US Real Estate Debt Regional Securities Asia Regional Securities Europe Residential - UK Residential - Germany Residential - Europe Single Country Americas Single Country Asia Single Country Europe Single Country Securities Asia Single Country Securities Europe UK Core Institutional Strategies that invest in Europe real estate/property with a very high level of activity such as letting, refurbishment and speculative development, marketed primarily to institutions. Diversification may be limited Strategies that invest in a mixture of Europe real estate/property with a high element of value add activity such as letting and refurbishment, with occasional speculative development, marketed primarily to institutions. Diversification may be limited Strategies investing in the debt issued against real estate assets or by real estate companies in the UK/Europe Strategies investing in the debt issued against real estate assets or by real estate companies in the US Strategies investing in the debt issued against real estate assets or by real estate companies in countries other than the US, UK or Europe or Global strategies Long only Asian listed property/reit/real estate securities strategies, other than those that focus on Japan Long only Europe inc UK listed property/reit/real estate securities strategies Residential strategies that are focused on investing in residential assets in UK which are rented at open market rent. Typically, these strategies will predominantly invest in apartments (multi-family) although they can invest in single-family housing as well Residential strategies that are focused on investing in residential assets in Germany which are rented at open market rent. Typically, these strategies will predominantly invest in apartments (multi-family) although they can invest in single-family housing as well Residential strategies that are focused on investing in residential assets in Continental Europe which are rented at open market rent. Typically, these strategies will predominantly invest in apartments (multi-family) although they can invest in single-family housing as well Real estate strategies that invest primarily in real estate/property in a single country within the Americas Real estate strategies that invest primarily in real estate/property in a single country within Asia Real estate strategies that invest primarily in real estate/property in a single country within Europe Long only Asian listed property/reit/real estate securities strategies Long only Eurozone listed property/reit/real estate securities strategies Strategies that invest in a diversified mixture of UK real estate/property, and are marketed primarily to institutions / // MERCER 30

34 UK Core Retail UK HLV UK Opportunistic Strategies that invest in a diversified mixture of UK real estate/property, and are marketed primarily to retail investors Strategies that invest in UK real estate/property with low risk characteristics Strategies that invest in UK real estate/property with a very high level of activity such as letting, refurbishment and speculative development, marketed primarily to institutions. Diversification may be limited UK Strategies that invest in UK real estate/property with niche strategies UK Real Estate Funds for Charities UK Value Add UK real estate funds for UK charities Strategies that invest in a mixture of UK real estate/property with a high element of value add activity such as letting and refurbishment, with occasional speculative development, marketed primarily to institutions. Diversification may be limited US Core Real estate strategies that invest primarily in core US real estate/property US Core Plus US Opportunistic US Value Add Real estate strategies that invest primarily in core plus US real estate/property Real estate strategies that invest primarily in opportunistic US real estate/property Real estate strategies that invest primarily in value added US real estate/property US Securities Long only US listed property/reit/real estate securities strategies / World ex US Securities Long only World ex US listed property/reit/real estate securities strategies Strategies for Insurers Product Group Customized Insurance Equity Customized Insurance Fixed Income Customized Insurance Strategy Solutions All equity customized insurance strategies for insurance policy monies All fixed income customized insurance strategies for insurance policy monies All strategy specific customized insurance strategies for insurance policy monies All other customized insurance strategies for insurance policy monies other than those that fit the definitions for Customized Insurance Equity, Customized Insurance Fixed Income or Customized Insurance Strategy Solutions / / / / MERCER 31

35 United Kingdom Product Group Active Liability Driven Investment (LDI) Pooled Active Liability Driven Investment (LDI) Segregated Balanced/Multi-Asset Cash Enhanced (LIBOR Plus net) Cash Pure (Sub-LIBOR net) Equity (All Cap) Equity (Small Cap) Equity (Socially Responsible) Liability Driven Investment (LDI) Pooled Liability Driven Investment (LDI) Segregated Mixed UK/Non-UK Equity UK Fixed Buy and Maintain Credit UK Fixed (Govt) UK Fixed (Govt & Non-Govt) UK Fixed (Index-Linked Gilts) Pooled strategies which actively manage investments relative to a generic liability-based benchmark Segregated/bespoke strategies which actively manage investments relative to a generic liability-based benchmark Long only strategies that invest in a mixture of equity, fixed income and other UK assets to form a balanced portfolio UK cash strategies with a benchmark of LIBOR-plus UK cash strategies with a sub-libor benchmark Long only or 130/30-type UK equity strategies that aim to outperform a UK equity index Long only or 130/30-type UK small cap equity strategies that aim to outperform a UK small cap equity index Long only or 130/30-type UK equity strategies that aim to invest in a socially responsible manner and to outperform a UK equity index (either a specialist SRI index or a mainstream UK index) A range of pooled products which focus on risk relative to pension fund liabilities rather than in absolute terms and which strive to hedge this risk using a variety of derivative instruments Segregated mandates which focus on risk relative to pension fund liabilities rather than in absolute terms and which strive to hedge this risk using a variety of derivative instruments Long only equity strategies that invest in a mixture of UK and overseas equities according to a pre-defined ratio (60/40, 70/30, 50/50 etc.) UK strategies other than Market Neutral Equity and Directional Long Short Equity strategies Long only UK fixed income strategies that seek to capture the credit premium and illiquidity premium of the UK credit markets, focusing on fundamentals predominantly within investment grade credit with minimal turnover, with a non-traditional benchmark approach Long only UK fixed income strategies that invest primarily in UK government bonds Long only UK fixed income strategies that invest primarily in a mixture of UK government and non-government bonds Long only UK bond strategies that invest primarily in inflation-linked UK bonds MERCER 32

36 UK Fixed (Non-Govt) Long only UK fixed income strategies that invest primarily in UK nongovernment bonds United Kingdom DC Product Group UK Pre & Post Retirement Solutions Funds for use in the UK DC market, specifically designed for scheme members as they move from the growth/accumulation phase and into the pre-retirement /retirement phase Target Date Target Date Funds designed for the use in the UK DC market Strategies and solutions designed for use in the UK DC market US Equity Product Group All Cap Core All Cap Growth All Cap Value Large Cap Core Large Cap Growth Large Cap Value Mid Cap Core Long only or 100% net exposure US equity strategies that do not have a consistent growth or value orientation and aim to outperform a US broad market equity index Long only or 100% net exposure US equity strategies that have a consistent growth bias and aim to outperform a US broad market equity or growth style index Long only or 100% net exposure US equity strategies that have a consistent value bias and aim to outperform a US broad market equity or value style index Long only or 100% net exposure US equity strategies that do not have a consistent growth or value orientation and aim to outperform a US broad market or large cap equity index Long only or 100% net exposure US equity strategies that have a consistent growth bias and aim to outperform a US broad market or large cap equity or growth style index Long only or 100% net exposure US equity strategies that have a consistent value bias and aim to outperform a US broad market or large cap equity or value style index Long only or 100% net exposure US equity strategies that do not have a consistent growth or value orientation and aim to outperform a US mid cap equity index / / / / / / / MERCER 33

37 Mid Cap Growth Mid Cap Value Long only or 100% net exposure US equity strategies that have a consistent growth bias and aim to outperform a US mid cap equity or growth style index Long only or 100% net exposure US equity strategies that have a consistent value bias and aim to outperform a US mid cap equity or value style index / / All US equity strategies that do not satisfy any other classification Small Cap Core Small Cap Growth Small Cap Micro Small Cap Value SMID Cap Core SMID Cap Growth SMID Cap Value Socially Responsible Targeted Volatility Long only or 100% net exposure US equity strategies that do not have a consistent growth or value orientation and aim to outperform a US small cap equity index Long only or 100% net exposure US equity strategies that have a consistent growth bias and aim to outperform a US small cap equity or growth style index Long only or 100% net exposure US equity strategies that aim to outperform a US micro cap equity index Long only or 100% net exposure US equity strategies that have a consistent value bias and aim to outperform a US small cap or value style index Long only or 100% net exposure US equity strategies that do not have a consistent growth or value orientation and aim to outperform a US smallto-mid cap equity index Long only or 100% net exposure US equity strategies that have a consistent growth bias and aim to outperform a US small-to-mid cap equity or growth style index Long only or 100% net exposure US equity strategies that have a consistent value bias and aim to outperform a US small-to-mid cap equity or value style index Long only or 130/30-type US equity strategies that aim to invest in a socially responsible manner and to outperform a US equity index (either a specialist SRI index or a mainstream US index) US equity strategies explicitly focusing on delivering returns with an absolute volatility significantly lower than the appropriate equity benchmark / / / / / / / US Fixed Income Product Group Bank/Leveraged Loans Long only US fixed income strategies that invest predominantly in floating rate senior secured/leveraged loans and aim to outperform a leveraged loan index MERCER 34

38 Cash Enhanced (LIBOR Plus net) Cash Pure (Sub-LIBOR net) Convertible Core Investment Grade Core Opportunistic Credit Credit Long Duration Government High Yield Intermediate Liability Driven Investment (LDI) Pooled Liability Driven Investment (LDI) Segregated Long Duration Mortgage Backed Municipal US cash strategies with a benchmark of LIBOR-plus US cash strategies with a sub-libor benchmark Long only US-based strategies that invest in convertible bonds and aim to outperform a US convertible bond market index Long only US fixed income strategies that invest predominantly in investment grade domestic debt and aim to outperform a broad US bond market index Long only US fixed income strategies that invest in both core investment grade issues as well as non-us, emerging markets, and high yield debt, while aiming to outperform a broad US bond market index Long only US fixed income strategies that invest predominantly in corporate debt and aim to outperform a credit-specific US bond index Long only US fixed income strategies that invest predominantly in corporate debt with a long duration and aim to outperform a long duration, credit-specific US bond index Long only US fixed income strategies that invest predominantly in US Treasury and Agency debt and aim to outperform a government-specific US bond index Long only US fixed income strategies that invest predominantly in belowinvestment grade debt and aim to outperform a high yield-specific US bond index Long only US fixed income strategies that invest predominantly in investment grade domestic debt with an intermediate term duration and aim to outperform a US intermediate-term bond market index Pooled strategies which focus on hedging risk relative to a specific pension fund liability curve using a variety of derivative instruments rather than aiming to outperform a published index or generate absolute returns Segregated strategies which focus on hedging risk relative to a specific pension fund liability curve using a variety of derivative instruments rather than aiming to outperform a published index or generate absolute returns Long only US fixed income strategies that invest predominantly in investment grade domestic debt with a long-term duration and aim to outperform a US long-term bond market index Long only US fixed income strategies that invest predominantly in mortgage-backed debt and aim to outperform a US mortgage-backedspecific bond index Long only US fixed income strategies that invest predominantly in municipal debt and aim to outperform a US municipal bond index All other US fixed income strategies that do not satisfy any other classification / / / / MERCER 35

39 Short Duration Short Term Mutual Funds Socially Responsible Stable Value TIPS/Inflation-Linked Bonds Long only US fixed income strategies that invest in predominantly investment grade domestic debt with a short term duration and aim to outperform a US short-term bond market index Long only US-based strategies that invest in highly liquid short term cash and cash equivalents, providing modest dividends and stability of principal Long only US fixed income strategies that are tilted towards socially responsible investments in some way and aim to outperform a broad US bond market index Long only US-based strategies that invest in high quality fixed income investments that through underlying wrap agreements are maintained on a book value basis Long only US fixed income strategies that invest predominantly in Treasury Inflation Protected Securities (TIPS) and aim to outperform a US inflation linked/tips index / / US Product Group Balanced Lifecycle Funds Target Date Lifecycle Funds Target Risk Long only strategies that invest in a balanced combination of US equities and US fixed income securities Professionally managed fund-of-funds that is diversified among broad types of asset classes. The fund is automatically adjusted over time to gradually become more conservative as the investor approaches retirement Professionally managed fund-of-funds that is diversified among broad types of asset classes. The fund has a predetermined asset allocation that remains static over time All other strategies that invest primarily in the US that do not satisfy any other classification / MERCER 36

40 4 Notes to Tables a) Hedge Fund/Absolute Return categories For the majority of hedge fund/absolute return strategies, managers should enter the monthly track record of their flagship commingled vehicle after the deduction of all investment management fees. Returns in,, and JPY are also required for some Hedge Fund/Absolute Return categories, where such currency classes exist. To confirm that the track record is a net time series and a total return in, please include "Total return, net " in the track record name to enable Mercer to identify it as such. Please contact us if such a track record is not available or represents a limited history of the strategy (for example if there is a longer track record available). Where applicable, managers should also provide the details of their broader asset-weighted composite performance, confirming whether this is net/gross, total/excess and currency and approximate volatility. Please ensure that the Benchmark field and the Yes/No question fields have been completed correctly, and that the field labelled Please provide any other relevant details on the performance numbers supplied: has been filled in with any other information that you think will help Mercer to understand what the track record relates to. b) Global Equity and Global Real Estate Securities categories Mercer maintains Global Equity performance universes containing track records that are submitted to GIMD in,, and NZD terms only. Please do not submit global equity track records that are expressed in, or any other base currencies for these strategies. Mercer performance universes for Global Equity expressed in, or other base currencies are compiled by Mercer by converting the track records that have been submitted to GIMD into the relevant base currency. Track records entered for Global Equity categories should relate to an unhedged cap-weighted global benchmark index such as MSCI World or FTSE World. Track records that relate to world ex home country benchmarks are acceptable provided that the home country is not the US, Japan, the UK, Germany, France, Switzerland or the Eurozone. Track records for strategies in these categories that are available to clients based in countries other than Australia, Canada and New Zealand should be entered in terms. If the strategy is also available to clients based in Australia, Canada and/or New Zealand, then additional track records expressed in, and/or NZD terms should also be entered. MERCER 37

41 Track records for strategies that are only available to Australian clients should be entered in terms only. Likewise, track records for strategies that are only available to Canadian clients should be entered in terms only, and track records for strategies that are only available to New Zealand clients should be entered in NZD terms only. For Global Real Estate Securities, similar comments to those outlined above apply, with the only exception being that track records should be entered in and/or terms only, as Mercer does not maintain or NZD performance universes for this category. To preserve the performance history of participating products, you can only enter or amend the most recent three quarters of Australian or Canadian dollar returns directly. To submit or amend returns prior to the last three quarters you should your request to in Australia or in Canada. For performance, please submit the full performance history, however only the most recent 3 months of returns will be added to the Mercer universe. c) Global Fixed Income/Global Credit/Global Inflation Linked The track records for Global Fixed Income should relate to one of the following: (1) a global unhedged sovereign-only benchmark index; (2) a global unhedged broad market or aggregate benchmark index; (3) a global hedged to sovereign-only benchmark index; (4) a global hedged to broad market or aggregate index; (5) a global hedged to sovereign-only benchmark index or (6) a global hedged to broad market or aggregate benchmark index. For options (1) or (2) you should submit a track record in terms, plus additional track records expressed in and/or terms if the strategy is available to clients based in Australia and/or Canada. For options (3) or (4) the track record should be expressed in terms. For options (5) or (6) the track record should be expressed in terms. The track records for Global Credit should relate to one of the following: (1) a global credit benchmark index, unhedged; (2) a global credit benchmark index, hedged to ; or (3) a global credit benchmark, hedged to. For options (1) or (2) you should submit a track record in terms. For option (3) you should submit a track record expressed in terms. The track records for Global Inflation Linked should relate to one of the following: (1) a global inflation linked benchmark index, unhedged; (2) a global inflation linked benchmark index, hedged to. You should submit a track record in terms. If you have track records in one of these categories for more than one of these types of benchmarks, you are encouraged to enter track records for as many of these variants as you can. You can enter multiple track records under the one strategy entry, so there is no need to create extra strategy entries to house the extra track records. MERCER 38

42 Track records that relate to world ex my home country benchmarks are acceptable provided that the home country is not the US, Japan, the UK or the Eurozone. Please do not submit track records that are expressed in, or any other base currencies for these strategies. Mercer performance universes for these categories expressed in, or other base currencies are compiled by Mercer by converting the track records that have been submitted to GIMD into the relevant base currency. To preserve the performance history of participating products, you can only enter or amend the most recent three quarters of Australian or Canadian dollar returns directly. To submit or amend returns prior to the last three quarters you should your request to in Australia or in Canada. For performance, please submit the full performance history, however only the most recent 3 months of returns will be added to the Mercer universe. MERCER 39

43 5 Currency Acronym Definitions Below is a table containing definitions of all the currency acronyms found in this document. Currency acronym CHF CNY DKK HKD JPY KRW MYR NOK PHP RUB SEK SGD ZAR Definition Australian Dollar Canadian Dollar Switzerland Francs China Yuan Renminbi Denmark Kroner Euro United Kingdom Pounds Hong Kong Dollars Japan Yen Korea Won Malaysia Ringgits Norway Krone Philippines Peso Russian Ruble Sweden Kronor Singapore Dollars American Dollars South African Rand MERCER 40

44 6 Important Notices References to Mercer shall be construed to include Mercer LLC and/or its associated companies Mercer LLC. All rights reserved. This contains confidential and proprietary information of Mercer and is intended for the exclusive use of the parties to whom it was provided by Mercer. Its content may not be modified, sold or otherwise provided, in whole or in part, to any other person or entity, without Mercer s prior written permission. The findings, ratings and/or opinions expressed herein are the intellectual property of Mercer and are subject to change without notice. They are not intended to convey any guarantees as to the future performance of the investment products, asset classes or capital markets discussed. Past performance does not guarantee future results. Mercer s ratings do not constitute individualized investment advice. Information contained herein has been obtained from a range of third party sources. While the information is believed to be reliable, Mercer has not sought to verify it independently. As such, Mercer makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential or incidental damages), for any error, omission or inaccuracy in the data supplied by any third party. This does not constitute an offer or a solicitation of an offer to buy or sell securities, commodities and/or any other financial instruments or products or constitute a solicitation on behalf of any of the investment managers, their affiliates, products or strategies that Mercer may evaluate or recommend. Research ratings For the most recent approved ratings of an investment strategy, and a fuller explanation of their meanings, refer to your Mercer representative. Conflicts of interest For Mercer s conflict of interest disclosures, contact your Mercer representative or see MERCER 41

45 Mercer universes Mercer s universes are intended to provide collective samples of strategies that best allow for robust peer group comparisons over a chosen timeframe. Mercer does not assert that the peer groups are wholly representative of and applicable to all strategies available to investors. MERCER 42

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