SRI funds show ‘durability’ in difficult conditions: report
Sustainable responsible investment (SRI) funds have been hit by the recent volatile market conditions but continue to outperform the S&P/ASX 200, according to a report conducted by AMP Capital Investors.
The report found that the median SRI manager has outperformed the S&P/ASX 200 over one, two, three and five-year periods. The results were compiled from the median returns of 12 Australian SRI managers.
“Although still outperforming, relative returns have been affected in the last year in part by the poorer relative returns of small companies, which SRI managers tend to be overweight in,” the report states.
“The last five years to 30 June 2008 have been characterised by outperformance of the growth index vs the ASX 200. At the same time, small companies have underperformed over one year, while outperforming over longer periods of time.
“Within this environment, the SRI median has delivered consistent outperformance against the S&P/ASX 200.”
While the SRI funds included in the survey did outperform the benchmark, the median returns of SRI managers and the S&P/ASX 200 are very similar.
Over one year the median SRI manager returned -13.35 per cent, while the ASX 200 returned -13.40 per cent. Over two years, the median SRI manager returned 11.72 per cent to the ASX 200’s 11.35 per cent, and over five years the figures were 16.39 per cent and 16.23 per cent respectively.
The returns of SRI managers have also been affected by the global credit crisis and slowing economic conditions.
The report was conducted by AMP Capital Investors director of sustainable funds Michael Anderson and investment specialist Angus Dennis.
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