Dimensional Fund Advisors has announced the launch of three environmental, social and governance (ESG) model portfolios via separately managed accounts (SMAs).
The three portfolios include a 100 per cent high growth option, an 80-20 per cent growth-defensive split and a 60-40 per cent balanced allocation at a total cost of 50 basis points.
Dimensional said that the portfolios had a “dual objective” to deliver meaningful environmental and social outcomes while outperforming benchmarks.
“More and more investors in Australia are wanting to invest sustainably without compromising good investment outcomes and while keeping costs low,” said Glenn Crane, Dimensional’s Australian CEO.
“So these solutions set within that structure are going to make sense for a lot of people.”
The ESG filters employed by Dimensional aim to “substantially reduce” exposure to greenhouse gas emissions and reserves. Gambling, tobacco, child labour, nuclear weapons and factory farming are among the targetted social considerations, paired with strong governance oversight.
“Our aim is to target specific sustainability characteristics that investors can understand and compare to industry standards,” Mr Crane said.
“We believe this approach enables more transparent reporting on investment and sustainability metrics relative to benchmarks.”
Rebalancing occurs automatically and is administered by the wrap platform once an investor is in the SMA, removing the need for any additional documentation.
Responsible Investment Association Australasia recently named Dimensional as a “responsible investment leader” for its commitment to responsible investment, systematic process to ESG, strong stewardship and a record of allocating capital to benefit stakeholders.
