GMO Trust Funds

Funds Group: GMO Trust Funds
Management Company:  Grantham, Mayo Van Otterloo & Co. LLC
Funds Affected: (1) GMO Climate Change Series Fund, (2) GMO Emerging Country Debt, (3) GMO Resources Fund
Principal Sustainable Investment Management Strategy: (1) Thematic Investing, (2) ESG integration, (3) ESG integration/Thematic Investing
Summary:
(1) GMO seeks to achieve the fund’s investment objective by investing primarily in equities of companies the advisor believes are positioned to directly or indirectly benefit from efforts to curb or mitigate the long-term effects of global climate change, to address the environmental challenges presented by global climate change, or to improve the efficiency of resource consumption.
The fund has a fundamental policy to concentrate its investments in climate change-related industries. The fund considers “climate change-related industries” to include clean energy, batteries and storage, electric grid, energy efficiency, recycling and pollution control, agriculture, water, and businesses that service such industries.
(2) GMO uses fundamental analytical techniques as the basis for its analysis with respect to both individual instrument selection and country outlook, incorporating aspects of ESG (environmental, social, and governance) criteria in so doing.

(3) GMO selects the securities the fund buys and sells based on its evaluation of companies’ published financial information and corporate behavior (such as profit warnings, share issuance or repurchase, and director dealings in company stock), sustainability and other ESG (environmental, social, and governance) criteria, securities’ prices, commodities’ prices, equity and bond markets, the overall global economy, and governmental policies.
The fund has a fundamental policy to concentrate its investments in the natural resources sector, and, under normal market conditions, the fund invests at least 80% of its assets in the securities of companies in that sector. The Fund considers the “natural resources sector” to include companies that own, produce, refine, process, transport, and market natural resources and companies that provide related equipment, infrastructure, and services. The sector includes, for example, the following industries: integrated oil, oil and gas exploration and production, gold and other precious metals, steel and iron ore production, energy services and technology, base metal production, forest products, farming products, paper products, chemicals, building materials, coal, water, alternative energy sources, and environmental services. The fund is permitted to invest directly and indirectly (e.g., through underlying funds or derivatives) in securities of companies tied economically to any country in the world, including emerging countries. In addition to its investments in companies in the natural resources sector, the fund also may invest up to 20% of its net assets in securities of any type of company.