The Ethica fund will exclude companies involved with tobacco and alcohol. Photo / Brett Phibbs
The Ethica fund will exclude companies involved with tobacco and alcohol. Photo / Brett Phibbs
KEY POINTS:
KiwiSavers with ethical concerns now have a second option to choose from.
Aventine, which runs the SuperLife KiwiSaver fund and SuperLife mastertrust, has launched an ethical fund called Ethica.
The fund aims to exclude investments which have an adverse impact on community values, but will include companies whichadopt sustainable practices, have good governance and don't have a permanent negative impact on the environment.
Investors will also be able to write to the fund's ethical committee to request the inclusion or exclusion of certain companies.
Superlife principal Michael Chamberlain said the company had been considering an ethical option since May last year.
"The challenge was to establish an investment option that adopted sound, best practice investment principles and that was aligned with the values and beliefs of New Zealanders who are concerned about New Zealand, our collective future and our individual rights and freedoms."
While Chamberlain said he expected only 5 to 10 per cent of investors to be interested, he said it was important to have an option for those people.
The fund's excluded-activity list includes any companies where gambling, tobacco, alcohol, armaments or pornography form a core part of its business activities.
Chamberlain said this would automatically rule out companies such as SkyCity and Lion Nathan.
It will also consider excluding companies where the main part of a company's income may be derived from involvement in the excluded-activity list, such as aluminium can producers, where a main part of their business is to supply cans to alcohol producers.
However, power generator Trustpower would be on the list because of the emphasis it places on renewable energy, as will Fletcher Building for its positive governance, Chamberlain said.
The ethical option is expected to add an additional 0.1 per cent in costs to the annual management fee, pushing it up from 0.3 per cent of funds under management to 0.4 per cent.
Ethica will have up to 60 per cent invested in shares and property and 40 per cent in cash and bonds.
Chamberlain said he expected the fund to be more volatile than comparative funds but to have a similar average return over the longer term.
Asteron was the first provider to launch an ethical fund in July last year. AMP Capital Investors is also in talks with other providers to offer an ethical product to the market.
