Managers line up for piece of the action

bt-funds-management/westpac/BT/funds-management-industry/

17 August 2000
| By Stuart Engel |

Some of the biggest names in the funds management industry are doing the sums on ethical funds with a view to launching their own funds.

BT Funds Management, AMP and Rothschild currently have research teams investigating the viability of ethical funds, both in a marketing and operational sense. A number of other fund managers are also rumoured to be considering entering the sector, but have yet to register prospectuses with the Australian

Securities and Investment Commission (ASIC).

News of the renewed interest in the sector comes amidst a hive of activity in the ethical investment sector. In the past six months, Westpac and Challenger have both entered the market for the first time and an ethical investment association has been formed. This week, Resnik Communications will put on Australia's first ethical investment conference in Sydney. On the research side, Westpac recently launched an ethical investment index while Assirt has produced an ethical segment to its managed funds performance data.

BT, AMP and Rothschild all say they are unlikely to launch ethical funds before the end of the year but may consider launching next year.

While research is still in its early stage, BT Funds Management head of retail Rob Coombe says the group is investigating whether a adequately robust process to screen a global fund on social and environmental grounds. The group will then back test the fund to see how well it would have performed over the last few years. On top of the proicess testing, the group will also research demand from advisers and consumers. If all is positive, BT will roll out the fund through wholesale and retail channels.

AMP is following a different tack. It is considering offering a global fund from its UK subsidiary Henderson firstly to wholesale mandates and maybe later to the retail market.

Ethical funds have had a stronger presence in the wholesale side of the business, although groups such as Hunter Hall and Australian Ethical have established sizeable funds in the retail market.

Westpac launched into the wholesale market earlier this year and Challenger is also looking at the wholesale market following the takeover of the Tyndall Ethical Balanced Investment Trust which it has renamed the Challenger Socially Responsive Investment Fund (Challenger SRI).

Challenger will continue to offer the trust to the retail market.

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