Nucleus Wealth introduces diversity metric

27 July 2020
| By Laura Dew |
image
image
expand image

The rise of issues such as Black Lives Matter has prompted Nucleus Wealth to include ‘diversity’ as an ethical exclusion in their portfolios.

 

The Melbourne-based wealth manager said the decision would give investors the option to remove companies from their portfolio if they did not have enough gender diversity on their boards.

 

As well as the worldwide Black Lives Matter protests, AMP was criticised for appointing a chief executive who had a verbal sexual harassment mark on his record.

 

Damien Klassen, head of Nucleus Wealth, said: “In an investment climate where diversity, specifically gender and race, are front of mind issues in the community generally two questions are suddenly more prominent.

 

“Does diversity improve financial performance? And, how can I, as an individual investor, express a preference for companies with diverse boards and management?”

 

The decision was taken in line with client demand and all investors’ assets were held in separately managed accounts meaning investors could take a bespoke approach to environmental, social and governance (ESG) metrics.

 

He said companies with good governance, a common ESG metric, tended to perform better than those with weaker corporate governance but that the data was mixed for the concept of diversity.

 

“There have been a lot of studies into the diversity of gender and race on company performance with, yes, diverse results. It still appears to be a good, but far from infallible, indicator of more innovative companies,” Klassen commented.

 

“On the positive side, group diversity increases networks, resources, creativity, and, importantly, innovation. On the negative side, more diversity can lead to less communication, increased group conflict, lower satisfaction and increased staff turnover.

 

Read more about:

AUTHOR

COMMENTS

Recommended for you

subscribe

Stay up to date with Australia’s top news and information source for the wealth management industry

MARKET INSIGHTS

sub-bg sidebar subscription

Never miss the latest news and developments in wealth management industry

Remus_au

Absolutely agree with you on this Les. That's how I see it too. The client facing "new" SOA document might shrink down a...

2 days 16 hours ago
Stephen Eedy

Most advisers are now degree-qualified with many years of actual practical industry experience, and are fully-qualified ...

2 days 16 hours ago
Dominic Widlake

This is all so ridiculous. I have 33 years experience, and have studied hard over the last 4 years to obtain the gov...

2 days 16 hours ago

AustralianSuper and Australian Retirement Trust have posted the financial results for the 2022–23 financial year for their combined 5.3 million members....

5 months ago

A $34 billion fund has come out on top with a 13.3 per cent return in the last 12 months, beating out mega funds like Australian Retirement Trust and Aware Super. ...

4 months 3 weeks ago

The verdict in the class action case against AMP Financial Planning has been delivered in the Federal Court by Justice Moshinsky....

5 months ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND