How Will Rising Costs and ESG Updates Shape Alphinity’s Sustainable ETF?

Context and Update

Fidante Partners Limited has released a replacement Product Disclosure Statement (PDS) for the Alphinity Global Sustainable Equity Fund - Active ETF (ASX – XASG), updating key investor information as of December 2025. The refreshed PDS clarifies the Fund’s Environmental, Social, and Governance (ESG) disclosures without altering the Fund’s investable universe or core investment strategy.

Notably, the Fund’s net transaction costs have increased to approximately 0.10% per annum of net asset value, up from 0.03% previously. While the management fees and performance fee structure remain unchanged, this rise in transaction costs warrants attention from investors monitoring fund expenses and their impact on returns.

Sustainable Investment Focus

The Fund continues to target high-quality companies globally that demonstrate net positive alignment with one or more of the United Nations Sustainable Development Goals (SDGs). Alphinity Investment Management, the Fund’s appointed investment manager, integrates ESG factors deeply into its fundamental research and portfolio construction process. This includes a rigorous exclusion list that filters out companies involved in activities such as thermal coal production without credible net zero transition plans, predatory lending, tobacco production, and controversial weapons manufacturing.

Governance of the Fund’s sustainability criteria is overseen by a Sustainable Compliance Committee, which includes external ESG experts to ensure adherence to the Fund’s Charter. Alphinity’s approach to stewardship also involves active engagement with investee companies on material ESG issues and voting on shareholder resolutions to encourage improved practices.

Operational and Market Structure

The Fund is listed on the ASX AQUA market, a platform tailored for managed funds and ETFs that offers enhanced liquidity and flexibility compared to traditional listings. Macquarie Securities (Australia) Limited acts as the Market Making Agent, providing liquidity by facilitating buy and sell orders during trading hours. The Fund bears the costs and risks associated with market making activities, which are designed to support orderly trading but may fluctuate with market conditions.

Investors can transact units either directly with the Responsible Entity, Fidante Partners, or on the ASX. The Fund’s buy/sell spread remains at +/-0.25% for direct transactions, while on-market trades incur standard bid-offer spreads. The Fund’s management fee is 0.75% per annum, with an estimated performance fee of 0.03% per annum based on historical averages.

Risk Profile and Investor Suitability

The Fund carries a high-risk profile, reflecting its active management style and exposure to global equities with ESG integration. Investors should be prepared for potential volatility and the possibility of capital loss over the short to medium term. The Fund is positioned for investors with a long-term horizon, typically five years or more, who seek to combine financial returns with sustainable investment principles.

Fidante and Alphinity emphasise that while ESG considerations are integral to the investment process, the Fund does not guarantee returns or capital preservation. Investors are encouraged to review the updated PDS and Target Market Determination carefully and seek independent financial advice tailored to their circumstances.