Aussie ESG funds see post-election boost
Australian equity environmental, social and governance (ESG) funds saw a post-US election boost, as the Biden presidency has benefited ESG funds with holdings in renewables.
President Biden had already signed several executive orders related to environmental protections, which included re-entering the US into the Paris Agreement.
According to FE Analytics, within the Australia Core Strategies universe, the Australian equity sector returned 1.23% over the 12 months to 30 November, 2020.
There were 19 funds labelled ethical/sustainable in the sector, with 11 outperforming the sector average.
Australian Ethical Australian Shares returned 17.59%, followed by Ausbil Active Sustainable Equity (12.21%), BlackRock Concentrated Total Return Share (5.7%), Perpetual Ethical SRI (4.53%) and Onepath Sustainable Investments Australian Share Trust (4.02%).
Among Australian Ethical’s top holdings were Macquarie Telecom; healthcare provider, Healius; New Zealand energy provider, Contact Energy; Bank of Queensland; and Bendigo and Adelaide Bank.
In its quarterly review, the fund said Joe Biden’s and the Democratic Party’s win in the US Presidential election would be a boost for equities related to renewable energy and climate change action.
“Over the quarter financials, healthcare, materials and utilities sectoral exposures drove the outperformance with both small and large capitalised companies contributing to this outperformance,” it said.
“The US general election win by Joe Biden is seen as a positive for climate change, while the growth of ESG funds around the world saw the market chasing many renewable and adjacent assets.
“The renewable energy generators and retailers out of New Zealand including Meridian Energy (+51.7%), Contact Energy (+35.6%) and Mercury Energy (+29.6%) were among the leading contributors while lithium producer Pilbara Minerals (+187.4%) was among our top 10 performers.”
Ausbil’s top holdings included CSL, BHP, Commonwealth Bank, Afterpay and NAB.
Perpetual’s top holdings included equity-based risk management, advice and solutions provider AUB Group; packaging company Orora; ANZ; NAB; and British multinational plumbing and heating products distributor, Ferguson.
Over that same time period, Maple-Brown Abbott’s (MBA) Responsible Investment fund lost 6.69%, followed by Franklin Templeton Australian Equity (-6.64%) and UBS IQ MSCI Australia Ethical ETF (-5.8%).
MBA’s top holdings were BHP, Wespac, ANZ, NAB and Coles; while Franklin Templeton’s were BHP, Westpac, ANZ, Telstra and Commonwealth Bank.
Best-performing ethical funds in the Australian equities sector over the 12 months to 30 November 2020
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