OP-Clean Water Fund

We cannot live without water, nor can we substitute it with something. Although water is not an exhaustible natural resource, only less than 1% of the world's water resources can be exploited by humans. In addition, the volume of fresh water reduces continuously as a consequence of pollution, groundwater depletion and climate change. At the same time, population growth and rising living standards increase water consumption everywhere. In the US, for example, the need for clean water has tripled in 30 years although the country's population has only doubled in the same period. In China, shortage of clean water is already a problem in two thirds of the country's cities and their strong growth only aggravates the water stress. Indeed, water has become a challenge everywhere. Advanced economies pour money on modernisation of their deteriorating water infrastructure. In developing economies, investments focus on building functioning water supply and curbing pollution. Enormous investments will be required to ensure water supply already in the coming years.

Solutions to water problems lie in innovations related to consumption, distribution and purification. Companies which succeed in making the availability and distribution of clean water more efficient will be at the cutting edge. For an investor, the equation is simple. The price of clean water will rise. Demand for water expertise will grow. Since water problems are global, clean water investment quite naturally offers geographical diversification for the investment portfolio, while the industry's versatile corporate structure enables investing in both growth and value companies.

OP-Clean Water is suitable for responsible investors seeking return for their money and wishing to contribute to solving problems related to clean water sufficiency. Because the fund invests its assets on the stock market, its value can fluctuate markedly depending on the market situation and, investing in accordance with the water theme, these stocks' value performance may deviate considerably from the general stock market performance. For stock investments outside the euro area, the fund is also exposed to currency risk. This fund is mainly recommended to an investor who intends to redeem his/her units after nine years at the earliest.

OP-Clean Water (Fund) is an equity fund which invests its assets in the global equity market. Investments may be made both in developed and emerging equity markets.

The Fund’s assets are invested in companies operating sustainably in the water resource management sector. This especially means companies involved in supplying water management infrastructure or developing water technology, as well as conglomerates that are market leaders in some the water resource sub-sector. The water resource sector contains a variety of growth and value-stock companies, and the Fund seeks to manage the portfolio’s risk level according to the market
conditions by varying the sector weightings.

The Fund's benchmark is the S&P Gb Water USD NTR. With active investing, the Fund seeks to outperform its benchmark index in the long term. The Fund mainly takes notable active risk and it may differ significantly from the composition, weights and risk level of the benchmark index.

The Fund invests its assets broadly in the global equity markets. Investments may be made both in developed and emerging equity markets.

Sustainable investments: the Fund invests in water industry companies whose business is in large part related to securing the water resources also in the future. This especially means companies focused on supplying water management infrastructure or developing water technology, as well as conglomerates that are market leaders in some water industry sub-sector.  Investee companies are screened using OP Asset Management’s analysis model, which is based on an external service provider’s SDG and sustainability data. Companies whose business promotes one or more UN Sustainable Development Goals (SDG) without harming other sustainable factors or goals are considered sustainable investments.

Exclusion: The Fund excludes from its active direct investments controversial weapon manufacturers, mining companies producing thermal coal, power companies using thermal coal, tobacco companies, and companies that have breached international standards and where engagement has been unsuccessful.  The list of excluded companies is public. In addition to general exclusion rules, the Fund does not invest in companies whose principal business is in unconventional oil and gas extraction or other fossil fuels (50% of revenue or more).

Violations of international standards: The Fund is screened regularly for non-compliances with international standards. If the company does not pass the screening, an engagement process is initiated with the company. The aim is to make non-compliant companies change their practices and begin to comply with international standards in their operations. If engagement does not bring results, the company may be removed from the Fund portfolio and placed on the exclusion list.

Shareholders’ meetings: The Fund votes in shareholders’ meetings through a service provider in line with OP Fund Management Company Ltd’s shareholder engagement principles that take responsibility aspects into account.

Methods for assessing good governance practices: Analysing the target company’s governance is an important part of the investment process. To us, good governance is a key foundation for any company’s financial success, regardless of sector. When assessing governance, some of the areas considered include the appropriateness company’s administrative organisation,  actions in relation to its personnel, and company’s reward and taxation practices. In assessing good governance, we use an external service provider’s analysis and our own qualitative analysis if no external data is available. We screen the funds regularly to check them against the criteria of good governance. Minimum limits apply for these criteria. 

As our owner-customer, saving and investing is especially worthwhile thanks to the excellent benefits you receive.

Your benefits when investing in funds:

• Buy and sell almost all OP mutual funds with no fees.*
• You earn 0.35% OP bonuses from mutual fund and insurance assets.** 

Your benefits when investing through insurance: 

• Begin saving through insurance free of charge. 
• You will earn 0.35% of OP bonuses from funds linked to insurance assets.***
• Switch between investments, invest additional funds and change your payment and investment plan for OP Unit-linked Insurance and OP Capital Redemption Contract free of charge in our digital services.  

**OP bonuses are used to pay the bank’s service charges and insurance premiums.

***You earn OP bonuses from unit-linked insurance policies, excluding individual unit-linked insurance policies and Individual Capital Redemption Contracts. The principles of contribution towards OP bonuses from funds linked to insurance assets will be harmonised with direct investments. As of 1 January 2025, the following funds linked to insurance assets will no longer contribute towards OP bonuses: third-party funds such as JP Morgan funds, structured loans and institutional class funds such as OP-World III A.

Your benefits in equity and ETF investing:

• Open an equity savings account or book-entry account free of charge.
• You get a discount on equity trading and a 1% fee ceiling when trading in Finnish listed companies through a book-entry account The discounts apply in digital services.
• Get access to free stock picks and analysis.
• Get a discount on the service packages for savers and investors:
  Equity savings account: 
  Saver: €0/month (normally €2.99/month)
  Investor: €9.99/month (normally €14.99/month)
  Book-entry account: 
  Saver: €0/month (normally €2.99/month)
  Investor: €0/month (normally €5.39/month)

Other benefits:

• Only owner-customers can invest in Profit Shares.

Remember to make use of all benefits:

Income unit generating annual cash flow, suitable for foundations

The fund’s unit class III A with a minimum subscription of 1 000,000 euros