ESG outperforms mainstream funds
Over the past financial year, managed responsible investment portfolios fell by an average of 3 per cent less than funds in the broader mainstream market, which dropped by 14 per cent over the same period.
This was one of the key findings to emerge from Responsible Investment 2009 — the ninth annual benchmark report commissioned by the Responsible Investment Association Australasia (RIAA).
According to RIAA executive director Louise O’Halloran, the report found that the average return of responsible investment in Australian shares, overseas shares and balanced growth managed funds outperformed the average mainstream fund over one year and seven years, with overseas shares and balanced growth managed funds outperforming the average mainstream fund over all time periods up to seven years to June 2009.
“In a period that witnessed the aftermath of the US sub-prime loan crisis, a worldwide collapse in asset prices and the flow through on the global financial crisis, this year’s benchmark figures once again confirm that taking environmental, social and governance (ESG) into account is a profitable and prudent investment strategy,” O’Halloran said.
O’Halloran confirmed that the level of mainstream institutional investor support for ESG issues was increasing, with the growth of Australian signatories to the United Nations-backed Principles for Responsible Investment up 34 per cent from 2008, with assets under management now standing at $554 billion.
AUTHOR
Mike Taylor
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