Karen McLeod of Ethical Investments sits on many ethical investment boards and divestment groups
Fossil fuel free portfolio for ethical investors
Have you heard about the National Divestment Day which will be held on Saturday 3rd May? If you are concerned about precious environmental areas like the Great Barrier Reef, not to mention our land, and water resources, then you may like to get involved. In the last 8 months, the campaign has asked the ‘big 4 banks’ to stop lending to new coal, oil and gas projects. They haven’t listened. If banks won’t divest from fossil fuels, then you can support the environment by closing your bank account and moving to a new bank. If you have shares in the ‘big 4 banks’ ANZ, Westpac, CBA or NAB, then you may like to consider your options and where you can re-invest.
A truly fossil fuel free portfolio now exists. Ethical Investment Advisers has created a new Separately Managed Account (SMA) that is perfect for ethical investors looking to divest from fossil fuels and invest in sustainable investments.
Finally investors and superannuation members can avoid fossil fuel investments (oil, gas, coal, and coal seam gas), tobacco, uranium mining, and weapons, whilst also investing in those companies which are providing positive solutions to global issues like aged care, sustainable property, healthcare, renewable energy, medical technologies, education, and information technology!
According to Ethical Investment Advisers’ Director Louise Edkins, “The model portfolio is an exciting product that offers social and environmental values with financial benefits. The mix provides a combination of smaller and medium sized Australian listed companies providing competitive financial returns without compromising their client values.”
The objective of the Ethical Investment Advisers Mid-Cap Separately Managed Account is to outperform the S&P/ASX Mid-Cap 50 over the long term, while providing investors with access to small and mid- cap stocks which meet environmental and socially responsible standards.
Responsible investment funds have a history of delivering better returns than average mainstream Australian equities funds over the past 1, 3, 5 and 10 years (Responsible Investment Association Australasia Benchmark Report, 2013). Performance of the S&P/ASX 200 Index over the past 10 years is very close to the S &P ASX 200 ex-fossil fuel companies. In addition there is no change in Beta and modest tracking error (The Australia Institute Climate Proofing Your Investments: Moving Funds Out Of Fossil Fuels, 2014).
The Ethical Investment Advisers Mid-Cap SMA since its inception in December 2013, has gained 5.74% compared with the All Ordinaries Index which gained 3.74% and the ASX Mid-Cap 50 Index which gained 7.46%.
The investments in the Mid-Cap SMA vary from time to time as we are always on the lookout for new investment opportunities. A few of our recent additions to the portfolio are outlined below.
Meridian Energy Limited is the only electrical generator in New Zealand which generates 100% renewable energy. It generates the largest proportion of New Zealand’s electricity and provides electricity to customers including homes, businesses and farms in New Zealand, and provides metering, dam consultancy and insurance services. Meridian Energy currently operates seven hydro stations and four wind farms in New Zealand and one wind farm in Australia.
Carnegie Wave Energy is an Australian wave energy clean technology development company. Carnegie is the owner and developer of the clean energy technology, called CETO Wave Energy Technology intellectual property. The CETO energy converter was designed to harvest the renewable energy resource in the ocean’s waves, produce high pressure water pumped ashore, and convert it into zero-emission electricity and/or freshwater desalinated from the ocean.
Investors and superannuation members can access the Ethical Investment Advisers Mid-Cap SMA by contacting Ethical Investment Advisers: www.ethicalinvestment.com.au or phoning 33332187.
Superannuation members want funds to consider ethical and environmental implications
Did you know that a quarter of superannuation members are prepared to switch super funds if they find their current one was invested in coal seam gas, based on concerns about environmental impact ? (Market Forces survey compiled by The Australia Institute, 2013.)
The Australia Institute also found that a greater proportion of respondents believed that in order for a superannuation company to make investments that were ‘in their long term interests’, funds should consider ethical and environmental implications (40 per cent) rather than simply maximising financial returns (36 per cent).
Karen McLeod, CFP®, B Bus is an Authorised Representative (No. 242000) of Ethical Investment Advisers. www.ethicalinvestment.com.au
Ethical Investment Advisers (AFSL 276544) has been certified by RIAA according to the strict disclosure practices required under the Responsible Investment Certification Program. See www.responsibleinvestment.org for details. CFP®, CERTIFIED FINANCIAL PLANNER TM and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. Financial Planning Association of Australia Limited is the marks licensing authority for the CFP Marks in Australia, through agreement with FPSB. The contents of this article are intended as general advice only. No specific person’s circumstances, financial situation or objectives have been taken into consideration. You should not act on the information provided without seeking personal advice from an appropriately qualified financial planner. Information included from third parties has been reproduced with their permission. While the source has been verified as reliable, the actual content has not been checked for accuracy. Consequently Ethical Investment Advisers does not warrant the accuracy of the information nor accept liability for any errors in the data.