Are you looking to grow your wealth by investing in companies that focus on ESG (Environmental, Social and Governance) criteria? Sustainable investing, also known as Socially Responsible Investing (SRI), is about investing in companies thinking ahead of the curve and focusing on the future and learning better ways of doing business. It’s the process of investing in companies that seek to fight environmental devastation and climate change while advocating corporate responsibility.
An ESG investment fund is one type of sustainable investment fund, where ESG factors are part of the investment decision-making process.
If you’re looking to invest in companies that share your values and priorities, turn to Centaur Financial; your local sustainable investment financial adviser on the Gold Coast.
“ESG-aligned managed funds outperformed in all Australian sectors for the three years to August 2020”. – Rainmaker Information
ESG investment funds research is something that we specialise in at Centaur Financial Services.
We do this by requesting each fund on our Approved Product List (APL) provide details of their ESG policy with attention paid to whether they are part of the Responsible Investment Association of Australasia (RIAA) and/or a signatory to the United Nations Principles of Responsible Investment (UNPRI), which is worlds leading proponent of responsible investment. UNPRI has outlined six principles for responsible investment. They are a voluntary and aspirational set of investment principles that work to develop a more sustainable global financial system.
Only the investment managers that at least meet the minimum screening standards can be adopted into our ethical investment models. Part of our role is to do the ongoing research to ensure that the investments you have are reflective of your values so we continually assess the available ESG managers in our investment universe.
The principles are:
Sustainable investing is an excellent option for anyone looking to have investments that positively impact society. Sustainable investing can be implemented through active managed funds, passive managed funds and ETF’s. Our ESG investment fund model is suitable for total portfolio allocation or allocation within a broader portfolio, with a suggested minimum investment of $50,000 over a minimum 7-year time frame.
If you are looking for investments that align with your personal preference for sustainable investing, while making a positive contribution to society, or you’re looking for a multi-asset growth-focused portfolio with both passive and active investment styles, sustainable investing is for you.
Our licensee ESG investment fund model has a strategic allocation of 90% to growth assets and 10% to defensive assets. It includes both Australian and international shares, implemented through active and passive management styles, listed property assets, and fixed income and cash. This ensures that you have a diversified investment portfolio representing a growth investment option over the medium to long term.
If sustainable investing piques your interest, and you want to invest ethically, get in touch with an expert sustainable investment funds investment adviser on the Gold Coast; Centaur Financial Services.
ESG investment funds are a type of sustainable investment fund, where Environmental, Social and Governance factors have been incorporated into the investment process.
The ESG factors are outlined below:
While it’s great to build wealth and watch your portfolio reach new heights, it’s even better knowing your investment is going towards responsible and ethical companies. This is one of the biggest personal benefits of investing in a sustainable investment fund managed by Centaur Financial Services.
On a much larger scale, your choice to invest sustainably, means your making a stand against companies doing wrong; companies that promote tobacco and alcohol, gambling, pornography, high-impact fossil fuels, predatory lending, and armaments manufacture or distribution. As sustainable investing continues to grow, the snowball effect will force change.
“Companies that incorporate ESG risk management are better long-term custodians of investor capital, offer greater downside protection and can generate better long-term risk adjusted returns.” – ftadviser.com
Sustainable investing has shown significant growth over the past few years, and as ethical investment opportunities continue to grow, so too will its popularity. In 2019 alone, the number of funds rose from 2,045 to 2,405, and COVID-19 hasn’t slowed things down at all. In fact, according to Morningstar, a US financial services firm, 23 new sustainable funds were launched in the first half of 2020 with more to come.
Australia & New Zealand Sustainable Fund and ETF launches
Sustainable / ESG investing has rapidly grown to accommodate investors’ demand, including more younger adults and women. Interesting, the GSIA 2016 Global Sustainable Investment states that three-quarters of Australian millennials say they prefer to invest in a responsible super fund than in a fund that only considers maximising financial returns. Moreover, a Vanguard survey revealed that women are more likely to expect their super or other investments to be invested responsibly and ethically (57% of women compared to 42% of men).
Companies are given an ESG Rating based on their cumulating total ESG performance. There are many different ratings, including the Bloomberg ESG Data Service, DowJones Sustainability Index (DJSI), and Corporate Knights Global 100, which are out of 100, and the MSCI ESG Research, which is rated CCC, B, BB, BBB, A, AA, and AAA; worse to best). A company with a AA or AAA MSCI ESG Rating is regarded at the forefront of its industry, in regards to managing the most significant ESG risks and opportunities.
Whether you are starting out as an investor or been doing it for years, there is value added through having professional management in using their skills and expertise to screen and filter through all the companies to choose the right ones to invest in. By using skilled investment managers, you will be able to ensure that your investments are invested in sustainable funds which are reflective of your ethical and responsible wishes.
From there you would like to diversify across the major asset classes (Australian shares, International shares, Listed property, and Fixed Income) to ensure that you are not taking too much risk to achieve your investment goals. Typically, this can be done through a risk profile exercise.
Once you have found sustainable funds and diversified appropriately, the next step is to ensure that you monitor the funds regularly to see that they are still reflective of your values and also that their performance is satisfactory.
Although sustainable investing isn’t for everyone, it does deserve consideration as part of your overall investment strategy for a couple of reasons, namely:
The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Centaur Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance.
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