New ethical fund targets Kiwi investors

The ethical fund will invest in a company which is expanding solar power in India. Photo/Vivek Prakash/Bloomberg.

An Australian fund manager is hoping to entice Kiwis to invest in a new ethical investment fund which claims to avoid companies which harm the environment, people and society.

Morphic Asset Management wants to raise A$220 million ($240m) for its Morphic Ethical Equities Fund which it will list on Australia's share market on May 3.

The fund will be the first ethical investment fund to listed on the ASX in 10 years.

Morphic managing director Jack Lowenstein said it expected to raise around $3m to $5m from Kiwi investors.

"I had five meetings yesterday in Wellington and the interest has been strong."

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Lowenstein is presenting his case in Auckland todaybefore flying back to his Sydney home base.

Lowenstein said there was strong recognition in New Zealand of socially responsible and ethical investment but there were not many options for people to get access to it.

The fund will avoid investment into coal, uranium mining, oil and gas, intensive animal farming and aquaculture, tobacco, alcohol, armaments, gambling and rainforest and old growth logging companies.

Lowenstein said a minimum of 5 per cent of the fund would also be invested in companies which were working to make a positive difference to the world.

So far that included investing in a power grid company in India which was bringing solar and wind power to more densely populated areas and French rail company Alston which was pioneering a hydrogen train to replace diesel trains.

"We are not going to invest in highly speculative tech companies but companies with a mature plan for taking technology and rolling it out for the betterment of the world."

Despite the ethical focus he said the fund was very much aimed at investment returns.

"People worry it is a bunch of moralists making the decision, but we are about investment performance."

The initial public fundraising closes on April 19 and Lowenstein said he planned to come back to New Zealand two or three times per year to keep investors up to date.