Australian Ethical (ASX:AEF) launches one of Australia’s first 100% ethical multi-asset high growth funds
24 September 2021: Australia’s original responsible investment and super fund manager Australian Ethical has launched one of Australia’s first 100 per cent ethical multi-asset high growth funds (the Fund), with an opening balance of $250 million repurposed from its former Advocacy Fund.
The Fund grows Australian Ethical’s line-up of actively-managed multi-asset options. It is open to all retail, wholesale and institutional investors through managed funds. It will also be available as an investment option for Australian Ethical Superannuation members.
It will allow everyday Australians to access illiquid assets, which historically have been the domain of wealthy impact investors and venture capitalists, with up to 20 per cent of the strategic asset allocation providing exposure to alternative assets like private equity, venture capital and infrastructure.
These assets offer the potential for better returns, while bringing greater diversification to the portfolio. This is achieved by extending the range of investment opportunities available into emerging sectors and companies at a different stage of maturity.
Examples of such investments Australian Ethical has previously made include allocations to the Right Click Capital Growth Fund, Artesian Clean Energy Seed Fund, Main Sequence CSIRO Innovation Fund, and Morrison & Co Growth Infrastructure Fund.
The Fund will therefore allow everyday Australians to allocate a portion of their money to potentially world-changing markets such as climate technologies, renewable energies, medtech and biotech.
This is particularly pertinent given climate is now the number one investment thematic for ESG investors.
In addition, the Fund will provide exposure to unlisted property holdings, which produce strong income and growth characteristics, in addition to providing diversification benefits.
The management fee for the Fund will reduce to 0.99 per cent for super, and 0.90 per cent for the managed fund, while the recommended minimum investment timeframe will increase from 7 to 10 years.
These changes will improve the diversification of assets, reduce the risk profile of the option, and target a more clearly defined after fees investment return objective of CPI+ 4.5 per cent per annum.
John McMurdo, CEO and MD of Australian Ethical, said: “We’re excited to be offering a 100 per cent ethical multi-asset high growth fund, giving everyday Australians the chance to put their money towards some world-changing industries.
“The launch of this Fund builds on our visionary roots and pushes the envelope of ethical investing in Australia by connecting everyday investors with transformational projects.”
John Woods, Head of Asset Allocation at Australian Ethical, said: “This high growth, multi-asset fund allows us to invest in some of tomorrow’s most innovative initiatives, and complements our enviable track record of delivering competitive returns through investing ethically in other asset classes.
“The most recent IPCC report made clear that decarbonising the global economy at the rate required will take a massive structural reallocation of capital to a net-zero economy combined with tremendous advances in technology. This Fund enables our customers to address both by investing significantly less carbon-intensive assets while also using their money to unleash the potential of some of tomorrow’s most innovative initiatives.”
Despite the Advocacy Option changing, advocacy remains a critical component of Australian Ethical’s purpose, which is to invest for a better world. Australian Ethical regularly advocates for change within companies it invests in, and also those that don’t meet its Ethical Charter. In the last financial year, it engaged with more than 500 companies, with recent examples available here.
Australian Ethical also engages with the government on policy issues relating to climate, biodiversity, human rights, and animal protection.