Ethical investment options are outperforming, and shareholder activism behind the category is increasing, said Prescott Securities investment specialist and financial adviser Alex Butler.
Mr Butler pointed out that last calendar year, responsible Australian share funds outperformed the ASX300 Accumulation Index.
“This has also been the case over three-, five- and ten-year time periods – clearly debunking the myth that responsible investing leads to underperformance,” he said.
Mr Butler argued that investors are now more conscious of how and where their money is invested.
“I am increasingly being asked by clients how I can help them invest for both purpose and return,” he said.
According to the Responsible Investment Association Australasia’s 2015 Benchmark Report, core responsible investment funds have grown by 24 per cent over the past year, injecting $6 billion into environmental, social and governance (ESG) investment options.
The report also indicated that responsible investment portfolios represent 50 per cent, or $629.5 billion, of total assets under management in Australia.
“Ethical investors often seek out companies with proven corporate social responsibility in clean energy, sustainable resources, manufacturing, health care and banking,” Mr Butler said.
“Everyone’s ethics and investment objectives are unique, however there are accredited managed funds and specialist advisers that can provide solutions for investors in this field.”
Mr Butler said ethical investors focus on sectors that provide both social benefit and the potential for growth.
“Determining what an ethical investment is may not be so clear cut, and the performance and outlook for the stock still needs to be considered,” he said.
