The Harm Reduction Stewardship Council (HRSC) has been established as an independent advisory body to strengthen the integrity, transparency, and credibility of Hexis’s investment stewardship—particularly in relation to the NICO ETF.
Its role reflects our conviction that meaningful engagement in tobacco and nicotine requires not only rigorous analysis, but also external challenge, multidisciplinary expertise, and clear accountability.
Role of the Council
The Council plays a dual role:
Strategic Guidance
The HRSC provides independent input on our engagement strategy, helping to shape company-specific objectives, escalation pathways, and alignment with fiduciary responsibilities.
Methodological Oversight
The HRSC offers oversight of the Hexis Nicotine Transition Score (HNTS), reviewing its methodology, underlying data, and evolution over time.
While its recommendations are non-binding, the HRSC serves as a critical mechanism to ensure that our approach remains robust, evidence-based, and responsive to emerging risks and opportunities.
Governance and Expertise
The HRSC brings together expertise across public health, harm reduction, investment stewardship, governance, and financial analysis. Members are selected for their independence and are free from recent affiliations with portfolio companies, ensuring objectivity in both engagement and methodological review.
The Council meets regularly, issues internal recommendations, and will publish an annual public statement to provide transparency and accountability for Hexis’s stewardship activities.
HRSC Leadership & Membership
Dr Derek Yach (Chair)
Dr Derek Yach is a globally recognised public health leader with decades of experience in tobacco control and harm reduction. Formerly an Executive Director at the World Health Organization, he played a leading role in the development of the WHO Framework Convention on Tobacco Control. He has since worked extensively at the intersection of health, policy, and industry transformation, including senior roles in the private sector focused on reduced-risk products.
Dr Peter Stanbury (Member)
Dr Peter Stanbury is an experienced investment professional specialising in stewardship, corporate governance, and responsible investment. He has advised institutional investors on engagement strategies and fiduciary practice across multiple sectors, with a particular focus on aligning long-term value creation with sustainability outcomes.
Broader Expert Engagement
Beyond the HRSC, and in order to take into account as wide a range of views as possible, the investment team of Hexis regularly solicits and receives views and feedback from a wide range of experts on an informal basis, including public health academics and campaigners.
Next article: Investment Process
An investor should consider the investment objectives, risks, and charges and expenses of the fund carefully before investing. A prospectus which contains this and other information about the fund may be obtained by calling 1-800-617-0004, or by clicking here. The prospectus should be read carefully before investing.
Investing involves risk. Principal loss is possible. The Fund is a recently organized entity, giving prospective investors a limited track record on which to base their investment decision. The Fund’s investments will be concentrated in the securities of issuers in the tobacco, or nicotine - related group of industries. The tobacco industry is subject to significant risks and uncertainties that could materially and adversely affect the financial condition and cash flows, of companies operating in it. Investing in foreign securities typically involves more risks than investing in U.S. securities, and includes risks associated with: (i) internal and external political and economic developments – e.g., the political, economic and social policies and structures of some foreign countries may be less stable and more volatile than those in the U.S. or some foreign countries may be subject to trading restrictions or economic sanctions; (ii) trading practices – e.g., government supervision and regulation of foreign securities and currency markets, trading systems and brokers may be less than in the U.S.; (iii) availability of information – e.g., foreign issuers may not be subject to the same disclosure, accounting and financial reporting standards and practices as U.S. issuers; (iv) limited markets – e.g., the securities of certain foreign issuers may be less liquid (harder to sell) and more volatile; and (v) currency exchange rate fluctuations and policies. Investment in emerging market securities involves greater risk than that associated with investment in securities of issuers in developed foreign countries.
Derivatives may pose risks in addition to and greater than those associated with investing directly in securities, currencies or other investments, including risks relating to leverage, imperfect correlations with underlying investments or the Fund’s other portfolio holdings, high price volatility, lack of availability, counterparty credit, liquidity, valuation and legal restrictions. A total return swap is a contract in which one party agrees to make periodic payments to another party based on the change in market value of the assets underlying the contract, which may include a specified security, basket of securities, or securities indices during the specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. The Fund is a non-diversified, investment company under the 1940 Act. Because the Fund is non-diversified, it will invest a greater percentage of its assets in the securities of a limited number of issuers. Investing in medium and small capitalization companies may involve special risks because those companies may have narrower product lines, more limited financial resources, fewer experienced managers, dependence on a few key employees, and a more limited trading market for their stocks, as compared with larger companies. The securities of micro-cap companies may be more volatile in price, have wider spreads between their bid and ask prices, and have significantly lower trading volumes than the securities of larger capitalization companies.
ETFs are subject to risks that the market price of an ETF's shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact an ETF's ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the ETF. Brokerage commissions will reduce returns
The Hexis Active Nicotine Engagement ETF is distributed by Quasar Distributors, LLC
Definitions used on these pages:
R&D: Research and development spend – investment in developing new products, technologies, or capabilities.
M&A: Mergers and acquisitions spend – spending on acquiring or merging with other companies to expand scale, capabilities, or market access.
Capex: Capital expenditure – investment in long-term physical or intangible assets such as facilities, equipment, or infrastructure.
Discounted Cash Flow (DCF) model – a valuation method that estimates a company’s value by discounting its expected future cash flows back to today.
Terminal value – the estimated value of a business beyond the explicit forecast period in a DCF model.
Terminal growth rate – the assumed long-term, steady growth rate used to calculate terminal value.
EV: Enterprise Value – a measure of a company’s total value, calculated as market capitalisation plus net debt
EBITDA: Earnings before interest, taxes, depreciation and amortisation