Altius unveils ethical bond fund

04-Dec-2014

By Elizabeth Somerville

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Altius Asset Management has launched a responsible investment bond fund to address consumer demand for ethical investment products offering stable, long-term returns.

The Altius Sustainable Bond Fund is a diversified Australian fixed interest portfolio designed to align with investors’ personal and social values without compromising long-term investment returns.

“We’ve heard a lot of discussion about the lack of opportunities for environmental, social and governance (ESG)-conscious investors to do something in the fixed income aspect of their portfolio,” Altius chief investment officer Bill Bovingdon told financialobserver.

“[We] decided to launch a fund that meets this growing demand while at the same time delivering solid results.”

Although some investors had always been more inclined to invest responsibly, such as those in the church or not-for-profit organisations, a recent trend towards ethical investments had led to more investors becoming interested in the area, Bovingdon said.

“[We’ve had interest from] an increasing amount of high net worth individuals with philanthropic objectives for their wealth.”

The fund would provide responsible investors with the ability to diversify their investment portfolios while staying true to their personal and social values, he said.

“Unfortunately, there are limited investment options available for investors looking for fixed interest investments managed with regard to ESG principles,” he said.

“As a result, fixed income may have been left out of their investment portfolios, which has restricted diversification and performance.”

The fund would automatically exclude bonds if the primary business activity of the issuer was not aligned with the fund’s ESG principles, he said.

That would include companies involved in the production of armaments, uranium and tobacco, he added.

The remaining investment options would then be screened in line with the Altius sustainability policy and would be given a sustainability rating, which would be incorporated into the portfolio construction process, he said.

“This ranking process is intended to assess the impact of the company’s operation on the wellbeing and sustainability of the community and environment in which it operates,” he said.

The process will be overseen by the Altius sustainability advisory committee, which includes two investor representatives: Uniting Financial Services senior portfolio manager Matthew Moore and Ethinvest managing director Trevor Thomas.

The new fund is the company’s third fund on public offer and was launched after a successful book build period in late November.

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