Investment Policy Statement: Bright Horizon Gestão de Ativos

The purpose of this Investment Policy Statement (IPS) is to establish the framework for the BHGA Fixed Income Europe ESG Fund, the first fund to be launched by BH Gestão de Ativos. This IPS integrates Environmental, Social, and Governance (ESG) criteria to align the fund's investments with sustainability principles, reflecting the growing demand for socially responsible investment solutions. The fund places significant emphasis on ESG factors, particularly the integration of renewable energy and green bonds, to ensure that the portfolio adheres to sustainability goals while maintaining financial returns. To achieve optimal portfolio performance, the IPS employs the Mean-Variance Theory, resulting in a portfolio with an expected return of 5.53% and a volatility of 6.38%. The fund’s investment strategy is guided by a set of strict restrictions, including minimum and maximum allocations to credit quality, currency, fixed-rate securities, and renewable energy investments. Notably, the fund mandates a minimum of 10% allocation to renewable energy and 80% to green bonds. The portfolio also follows the 5/10/40 diversification rule, ensuring a balanced approach to risk and asset exposure. For risk analysis, the IPS incorporates Value at Risk (VaR) and Expected Shortfall methodologies to assess potential downside risk and financial stability. Additionally, the Summary Risk Indicator (SRI) is computed to ensure compliance with risk tolerance and regulatory requirements, and a Stress Test was performed to explore tail risk. This comprehensive approach to risk management and ESG integration provides a robust framework for the fund's long-term financial and sustainability objectives.