Tough times for SRIs

Ethical fund returns have had a rough six months competing in an environment of considerable sharemarket volatility, according to research undertaken byLonsdale Securities

In a report issued by the group, the September quarter was identified as a difficult period for all ethical managers, in particular for those who follow a growth style.

The results of the Lonsec’s research indicate that the only funds to outperform the S&P/ASX300 over the quarter were the Hunter Hall Value Growth Trust and the Australian Ethical Large Companies Trust.

The report goes on to add that when compared to the performance of an average Australian equities manager, the only fund to outperform over the quarter was the Hunter Hall Value Growth Trust.

The Hunter Hall Value Growth Trust, along with the Australian Ethical Large Companies Trust and the Australian Ethical Equities Trust were the only funds in the survey with a track record of more than three years. All three funds outperformed the S&P/ASX300 Index over the three year period, to 30 September 2001.

In its report, Lonsec states performance histories of other ethical funds are difficult to gage, as most have track records significantly below three years.

“Lonsec is loath to make any strong judgements of a funds manager’s ability over timeframes of less than three years. Unfortunately, very few of the current ethical funds open to Australian investors have track records of this length of time,” the group says.