New Fund Sets Benchmark for Responsible Investment in NZ

New Fund Sets Benchmark for Responsible Investment in NZ

Pathfinder Global Responsibility Fund launches on Sharesies and deploys best-practice environmental social and governance (ESG) criteria to determine investments

A new fund that sets a new benchmark for responsible investment in New Zealand has launched today on the Sharesies investment platform (www.sharesies.com).

The Pathfinder Global Responsibility Fund uses best practice responsible investment frameworks, actively incorporating Environmental Social and Governance (ESG) factors into its stock selection and ownership practices.

Pathfinder Chief Executive John Berry says: “We are determined to set the benchmark for responsible investment in New Zealand. A recent RIAA analysis1 showed that just three of the domestic fund managers that have signed up to the United Nations Principles of Responsible Investment (UNPRI) are achieving internationally-recognised best-practice standards.

“Many New Zealand fund managers’ responsible investment practices extend only to the exclusion of companies in a narrow range of sectors. Many do not see the need for responsible investment to go further. They regard environmental, social and governance factors as only relevant to specialist funds rather than having broad appeal. Sometimes managers almost describe responsible investment as an after-thought.

“We don’t think that goes far enough. We believe the investing public expects a more proactive, common-sense approach that is positive and goes beyond simple exclusions.

“The Pathfinder GRF combines a comprehensive stock screening process developed by the environment, social and governance (ESG) investment consulting firm Sustainalytics2 with our views on the sectors, regions and markets that offer the most attractive investment prospects.

“We believe ESG screened funds have the potential to deliver returns at least as good as, but potentially better than, similarly-constructed global portfolios with no ESG screening. At the same time, they allow people to invest in a way that is aligned with their aspirations for higher business values and a better world.”

Sharesies Founder and Director Leighton Roberts says: “Personally, we have a desire to invest in companies that are making the World a better place, and our customers are the same. Investors on the Sharesies platform have been asking us to give them a responsible investment option since we launched in June of this year, so we are really excited.

“The Pathfinder Global Responsibility Fund approaches responsible investment in a way that is aligned to what Sharesies wants to be able to offer: simple, easy to understand, no-nonsense investment options. We are delighted to partner with Pathfinder for the Global Responsibility Fund launch to give access to more Kiwi’s.”

The Pathfinder GRF invests in a portfolio of 250 stocks selected from the Morningstar Developed Markets Index. However, it excludes companies on the NZ Super Fund exclusions list (such as those that manufacture cluster munitions, anti-personnel mines, tobacco, or those that manufacture or test nuclear weapons or process whale meat).

It also excludes companies that generate material revenue from gambling, tobacco, controversial weapons, adult entertainment and thermal coal and those companies whose investments are generating significant controversy in international markets.

Finally, the companies that make it into the fund will be those that:

Achieve the highest score within the Sustainalytics ESG framework; and

Offer the most compelling geographic, industry sector and market investment potential as determined by Pathfinder’s criteria.

The final portfolio is equally weighted and provides some protection against adverse currency movements.

The launch of the GRF follows the successful launch of a wholesale version of the fund in May this year. The wholesale fund has attracted $47 million of investment from Ngai Tahu. Sharesies are making this strategy accessible to everyone.

Responsible investment is growing in popularity worldwide, having enjoyed a 135% increase in assets under management since 2012 to US$8.72 trillion in 2016, and it’s still growing, according to the United States Forum for Sustainable and Responsible Investment3.

In New Zealand funds that are deploying responsible investment strategies have risen 67% over the last year to $131.3 billion, according to the RIAA. The increase is largely driven by Kiwisaver funds negative screening on cluster munitions, tobacco, land mines and nuclear devices.

ENDS

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