Australian and global equities boutique fund manager, Alphinity Investment Management, has set a new standard in sustainable investing with the launch of the Alphinity Sustainable Share Fund (SSF).
The fund seeks to address the 17 UN Sustainable Development Goals (SDG) agenda in its investment. It has also appointed Australian Environmental, Social, Governance (ESG) investment pioneer Elaine Prior and fellow ESG veteran and Action Sustainability Asia Pacific co-founder Mark Lyster to its Sustainable Share Fund Compliance Committee, to provide an independent external review of companies in which the fund has invested.
Lonsec has recognised the strength of Alphinity‘s ESG investment framework and compliance committee by giving the new fund a Highly Recommended rating. In its rating report, Lonsec said it liked Alphinity’s ‘boutique’ ownership structure, and the investment philosophy of the investment team which applied a proven and well formulated combination of quantitative and fundamental analysis.
The Alphinity SSF provides a diversified portfolio of Australian stocks that have strong ESG characteristics and, where possible, contribute towards the advancement of the UN Sustainable Development Goals. The Alphinity SSF aims to outperform the S&P/ASX 300 Accumulation Index (after fees) over rolling five-year periods. The fund will typically hold between 35-55 stocks and has a management fee of 0.95 per cent.
Bruce Smith (pictured), Principal and Portfolio Manager of the Alphinity SSF, says: “Society faces significant challenges to achieve sustainable development. Alphinity aims to address these challenges. We are committed to supporting companies our research shows do good and avoiding those that don’t.
“We seek companies which, along with offering attractive financial returns, have strong ESG practices and/or have the capacity to make a positive impact on society in areas of economic, environmental and social development by contributing towards the advancement of the UN SDG agenda. We avoid companies that are materially involved in activities we consider harmful to society and are inconsistent with the achievement of the goals, and/or display poor practices in their management of ESG issues.”
Stephane Andre, Principal and Portfolio Manager of the Alphinity SSF, says: “The Alphinity Sustainable Share Fund is true to label. Sustainability is not just an add-on or a ‘bumper sticker’, it is at the core of this fund. For example, we will not support companies which generate more than 10 per cent of their revenues from producing or operating high impact fuels such as uranium, thermal coal, coal seam gas, oil sands and arctic drilling which are considered environmentally unfriendly and for which sustainable alternatives exist.
“The fund also excludes companies involved in gold mining, animal mistreatment, old growth forest logging, predatory lending and hostile debt collection, and pornography. It will however invest in some companies in extractive industries, as the provision of certain commodities are vital if you want to achieve sustainable development,” said Mr Andre.
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