Lonsec has released its Australian and global equity responsible investment sector review, assigning two funds out of 10 with its highest rating.
Lonsec awarded Australian equity funds BT Wholesale Ethical Share Fund and the ING Wholesale Sustainable Investment Australian Shares Trust with a highly recommended rating.
The review noted performance across the responsible investment sector continues to hold up well in comparison to mainstream Australian equity funds, with a number of funds delivering pleasing excess returns over one and three years to June 2010.
Lonsec’s senior investment analyst Steve Sweeney said while it was a fairly unremarkable year in terms of product development, there were a number of significant team movements impacting on the sector.
“Offerings from AMP Capital, Australian Ethical and Challenger all experienced significant personnel change,” he said.
Sweeney said the lack of new entrants highlights the responsible investment sector’s continuing adjustment to subdued post credit crunch appetite for equity products.
“There are a few exceptions, for example emerging market funds, but generally this trend is consistent with product development across most equities categories as fund managers continue to consolidate product lines,” he said.
Despite the lack of product growth, Lonsec’s review observed an increased integration of environmental, social and governance practices into the mainstream company research process.
Sweeney said this trend has not been exclusive to funds in the traditional ethical or socially responsible investment sector but across other sectors including Australian equities, global equities, Asian and emerging market funds.
