S&P SRI sector review keeps AMP funds 'on hold'
Standard & Poor’s (S&P) has affirmed its ratings for most socially responsible investment (SRI) fund strategies, with the exception of AMP’s Capital Sustainable Share Funds, which remain ‘on hold’.
As part of its sector review, S&P has affirmed its ratings for the Australian-equity SRI peer group. The exception were AMP’s, which were placed ‘on hold’ in April following the departure of environmental, social and governance (ESG) researcher Nick Edgerton.
Referring to the differing investment styles of ethical investing and sustainable investing, S&P Fund Services analyst Sheela Veerappan said investors must understand the differences in how funds are managed. She noted that performance outcomes can differ significantly from more benchmark-aware core Australian-equity funds.
Veerappan said of the four managers reviewed, BT Investment Management, Perpetual, and Australian Ethical Investment use a combination of negative and positive screens.
“We believe Perpetual’s use of two external research providers with complementary skills sets provides a more comprehensive coverage of the different SRI issues,” she said.
She said AMP’s process, on the other hand, involves analysing ESG factors, which are integrated in its valuation process to determine a company’s long-term intrinsic value.
Recommended for you
The month of April enjoyed four back-to-back weeks of growth in financial adviser numbers, with this past week seeing a net rise of five.
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With the election taking place on Saturday (3 May), Adviser Ratings examines how the two major parties could shape the advice industry in the future.
