Rothschild has launched two ethical investment funds which aim to outshine other funds on the market in terms of transparency of ethical bias to investors.
Rothschild Australia Asset Management managing director Peter Martin says some of Australia’s fund managers have entered the ethical market with vague and clouded investments, causing confusion among investors.
“Ethical investments need to have clarity and transparency so investors are aware of exactly what they are entering into,” Martin says.
“There is no one product the same in this market, and fund managers need to decide how their product fits into the market and what it does or doesn’t do – we think that is fundamental,” he says.
Martin says the group has spent the past few months conducting a survey of financial planners and asset consultants to measure industry interest in ethical funds in the lead-up to today’s launch.
He says the research, which surveyed over 2000 financial advisers and investment consultants, found a substantial boost in investor demand of ethical products.
Product manger Leanne Bradley says the research found advisers did not have a fund manager they could confidently invest in.
“As part of our research, we found that 50 per cent of advisers say they would be interested in ethical funds. We also found 40 per cent say they might, if the investments were clearer,” Bradley says.
She says the lack of assurance given to advisers by fund managers has spurred Rothschild to appoint Sustainable Investment Research Institute (SIRIS) to carry out the group’s screening process.
“The trusts will be managed in accordance with our recommended and approved Australian equities process – one of the only ethical managers to have such a process,” Bradley says.
Rothschild Asset Management manager, product development, Mark Watmore, says the research found that two thirds of the surveyed advisers had used an ethical product before, giving the group strong support to look at their own product.
“The launching of these funds is not Rothschild’s ethical stance. It is what the customers are looking for in an ethical fund,” Watmore says.
“They are tailor made products -for the mainstream market place,” he says.
The two wholesale trusts launched today will be available from April 24 to retail clients through master funds. The group now joins the likes of AMP, Challenger and Westpac in offering ethical funds.
The two trusts, the Rothschild Ethical Share Trust and the Rothschild Ethical Conservative Trust (formerly the Charities Wholesale Trust) are aimed at investors seeking higher returns from a portfolio that reflects their personal values and concerns.
The Rothschild Ethical Share trust will invest purely in Australian shares while the Rothschild Ethical Conservative trust will have a portfolio of fixed interest, cash and limited amount of Australian shares.
