Perpetual joins ethical band with new fund
Perpetual Investmentshas launched a socially responsible investment (SRI) fund, following two years of research to determine investor and financial adviser interest in ethical investing.
The Perpetual Wholesale Ethical SRI fund is a wholesale offering but will be made available to retail investors with a minimum investment of $50,000. Retail investors will also have access to the fund via wrap and master trust providers.
Perpetual chief investment officer Emilio Gonzalez says an internal survey of 200 advisers, as well as existing research in the market was used to gauge adviser interest.
“It [the fund] has been on our radar screens for about two years. Planners and research houses have expressed an interest for a mainstream Australian equities manager to come out with an SRI fund,” Gonzalez says.
According to Gonzalez a retail product could be made available in the future, depending on the level of demand and interest for the wholesale fund from independent financial advisers.
“We will focus first on the wholesale side and rely on feedback from independent financial planners. We will wait and see what the level of interest is and then look at launching a retail fund going forwards,” he says.
The investment approach for Perpetual’s SRI fund will be based on the group’s Australian equities approach, with companies assessed by the same four investment criteria used to examine the issues of management, debt levels, the quality of the business and recurring income streams.
As well as the stock quality filter, the fund uses an exclusionary criteria and will exclude companies who derive a portion of revenue from the sale or production of alcohol, tobacco, weapons and armaments, gambling and uranium.
Stocks will also be subjected to both negative and positive screens, with companies assessed on socially responsible business practices covering issues such as environmental impact, human and animal rights and community awareness.
Perpetual has also signed up the services of two external research specialists to evaluate a company’s performance with an ethical criteria. The Sustainable Investment Research Institute (SIRIS) are involved with obtaining information from the company while Integrated Strategies conduct their research through the public domain and have no contact with the company, Gonzalez says.
“We looked at a number of organisations and these two complemented each other, as well as casting the net wider,” he says.
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