SEC Company Response from PACIFIC FUNDS SERIES TRUST (CIK 0001137761) — Jul 29, 2021
PACIFIC FUNDS SERIES TRUST (CIK 0001137761)
Date: July 29, 2021 · CIK: 0001137761 · Accession: 0001104659-21-097379
AI Filing Summary & Sentiment
File numbers found in text: 333-61366, 811-10385
Referenced dates: July 12, 2021
Letter
VIA EDGAR Division of Investment Management United States Securities and Exchange Commission Washington, D.C. 20549 RE: Supplemental Comments Letter Pacific Funds Series Trust (File Nos. 333-61366, 811-10385)
Dear Ms. Choo:
This letter is being provided pursuant to our conversation on July 16, 2021, during which you provided comments on behalf of the U.S. Securities and Exchange Commission staff (“Staff”) regarding two responses that were contained in our letter dated July 12, 2021, which responded to comments from the Staff on post-effective amendment No. 162 to the registration statement of Pacific Funds Series Trust (“Registrant”). Set forth below are the Staff’s follow-up comments followed by Registrant’s responses.
Comment on Reply to Comment #6(ii): Principal Investment Strategies – ESG Criteria: Please supplementally inform the Staff what percentage of the Fund’s portfolio (not “performance”) is expected to be evaluated under ESG Criteria.
Response: Because the ESG Criteria are used to effectuate the Fund’s ESG strategy, analogous to how value or growth criteria might be utilized by a mutual fund that employs a value or growth strategy, and not to define a particular type of investment or investments, the Fund does not, in fact, apply the criteria to a predefined portion of its assets, but rather, utilizes the criteria in the execution of its overall strategy, subject to the previously articulated data constraints applicable to certain types of investments, which are disclosed. Based on the manager’s current outlook regarding available investment opportunities and existing data limitations, portfolio holdings that are evaluated using ESG Criteria as part of the investment selection process are generally expected to comprise at least 80% of the Fund’s assets.
Page 1
Pacific Funds – Response Letter
July 29, 2021
Page 2 of 2
Comment on Reply to Comment #17: Non-Fundamental Summaries of Current Legal Requirements and Interpretations Related to Certain Fundamental Investment Restrictions: Please note that a Fund (that operates as a fund of funds) and its investment adviser may not ignore the investments of affiliated and unaffiliated underlying investment companies when determining when the Fund is in compliance with its concentration policies. The Staff does not agree that considering the existence of a concentration policy of each underlying investment company when determining the Fund’s own concentration policy is reasonable and appropriate and achieves the same goal sought by the Staff. Specifically, an underlying fund’s concentration policy does not tell the Fund the percentage of the underlying fund’s investments in the industry in question, nor does the absence of a concentration policy indicate that an underlying fund does not have a significant percentage (though less than 25%) of investments in a particular industry. To the extent the Fund has timely access to portfolio information on the underlying affiliated and unaffiliated funds in which they invest, the Fund should take that information into account when determining whether the Fund is in compliance with its own concentration policy.
Response: Registrant has considered the Staff’s follow-up comment and believes that Registrant does take into consideration the securities that a Fund has purchased, specifically the shares of affiliated and unaffiliated underlying investment companies, for the purposes of determining a Fund’s concentration policy when it considers that underlying investment company’s concentration policy. Registrant takes the position that a security purchased by an affiliated or unaffiliated underlying investment company is not a security purchased by a Fund for purposes of the Fund’s concentration policy. Accordingly, Registrant reiterates its response to Comment #17, restated here: In response to prior Staff comments, Registrant added disclosure that a Fund that operates as a fund of funds will consider the investments of all investment companies in which that Fund invests by considering the existence of a concentration policy of each such investment company when determining compliance with the Fund’s own concentration policy. Registrant believes its current approach is reasonable and appropriate, and achieves the same goal sought by the Staff.
In addition, Registrant believes that it appropriately discloses material risks to which a Fund is expected to be exposed, including through indirect exposures to underlying fund holdings. Registrant therefore respectfully declines to make the requested change.
If you have any questions or further comments please contact me at (949) 219-3224.
Sincerely,
/s/ Mark Karpe
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MARK KARPE
Assistant Vice President, Counsel
Office: (949) 219-3224
Fax: (949) 219-3706
E-mail: Mark.Karpe@PacificLife.com
July 29, 2021
VIA EDGAR
Yoon Choo, Esq.
Senior Counsel
Division of Investment Management
United States Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
RE: Supplemental Comments Letter
Pacific Funds Series Trust
(File Nos. 333-61366, 811-10385)
Dear Ms. Choo:
This letter is being provided pursuant to our conversation on July 16,
2021, during which you provided comments on behalf of the U.S. Securities and Exchange Commission staff (“Staff”) regarding
two responses that were contained in our letter dated July 12, 2021, which responded to comments from the Staff on post-effective
amendment No. 162 to the registration statement of Pacific Funds Series Trust (“Registrant”). Set forth below are
the Staff’s follow-up comments followed by Registrant’s responses.
Comment on Reply to Comment #6(ii): Principal
Investment Strategies – ESG Criteria: Please supplementally inform the Staff what percentage of the Fund’s portfolio
(not “performance”) is expected to be evaluated under ESG Criteria.
Response: Because the ESG Criteria are used to effectuate
the Fund’s ESG strategy, analogous to how value or growth criteria might be utilized by a mutual fund that employs a value or growth
strategy, and not to define a particular type of investment or investments, the Fund does not, in fact, apply the criteria to a predefined
portion of its assets, but rather, utilizes the criteria in the execution of its overall strategy, subject to the previously articulated
data constraints applicable to certain types of investments, which are disclosed. Based on the manager’s current outlook regarding
available investment opportunities and existing data limitations, portfolio holdings that are evaluated using ESG Criteria as part of
the investment selection process are generally expected to comprise at least 80% of the Fund’s assets.
Page 1
Pacific Funds – Response Letter
July 29, 2021
Page 2 of 2
Comment on Reply to Comment #17: Non-Fundamental
Summaries of Current Legal Requirements and Interpretations Related to Certain Fundamental Investment Restrictions: Please note that
a Fund (that operates as a fund of funds) and its investment adviser may not ignore the investments of affiliated and unaffiliated underlying
investment companies when determining when the Fund is in compliance with its concentration policies. The Staff does not agree that considering
the existence of a concentration policy of each underlying investment company when determining the Fund’s own concentration policy
is reasonable and appropriate and achieves the same goal sought by the Staff. Specifically, an underlying fund’s concentration policy
does not tell the Fund the percentage of the underlying fund’s investments in the industry in question, nor does the absence of
a concentration policy indicate that an underlying fund does not have a significant percentage (though less than 25%) of investments in
a particular industry. To the extent the Fund has timely access to portfolio information on the underlying affiliated and unaffiliated
funds in which they invest, the Fund should take that information into account when determining whether the Fund is in compliance with
its own concentration policy.
Response: Registrant has considered the Staff’s
follow-up comment and believes that Registrant does take into consideration the securities that a Fund has purchased, specifically the
shares of affiliated and unaffiliated underlying investment companies, for the purposes of determining a Fund’s concentration policy
when it considers that underlying investment company’s concentration policy. Registrant takes the position that a security purchased
by an affiliated or unaffiliated underlying investment company is not a security purchased by a Fund for purposes of the Fund’s
concentration policy. Accordingly, Registrant reiterates its response to Comment #17, restated here: In response to prior Staff comments,
Registrant added disclosure that a Fund that operates as a fund of funds will consider the investments of all investment companies in
which that Fund invests by considering the existence of a concentration policy of each such investment company when determining compliance
with the Fund’s own concentration policy. Registrant believes its current approach is reasonable and appropriate, and achieves the
same goal sought by the Staff.
In addition, Registrant believes that it appropriately discloses
material risks to which a Fund is expected to be exposed, including through indirect exposures to underlying fund holdings. Registrant
therefore respectfully declines to make the requested change.
If you have any questions or further comments please contact me at
(949) 219-3224.
Sincerely,
/s/ Mark Karpe
Mark Karpe
cc: Robin S. Yonis, Esq., Pacific
Life Fund Advisors LLC
Laurene MacElwee, Pacific Life Fund Advisors LLC
Audrey L. Cheng, Esq., Pacific Life Insurance
Company
Anthony H. Zacharski, Esq., Dechert LLP
Rachael Schwartz, Esq., Sullivan &
Worcester LLP