So-called “woke” funds are proving to be a profitable option for conscientious investors.
Investment company Pathfinder Asset Management opened up its Ethical Trans-Tasman Fund to retail investors this week in response to strong demand.
The fund consists of a mix of Australian and New Zealand companies with high environmental, social and governance ratings.
Its chief executive, John Berry, said such funds are increasingly popular amongst people concerned about where their investment dollars are going.
He said ethical funds deliver strong returns to investors.
“I think the evidence is really clear that companies that are high on environmental and social metrics are actually more robust companies.
“We’ve seen, particularly through March and April this year when there was a lot of financial markets turmoil, fund managers that included environmental and social metrics in their investment process did much better then average.”
Pathfinder’s ethical fund was previously exclusive to wholesale investors, and since September had shown wholesale investors a strong 21% return after fees and before tax.
The asset management company decided to open up the fund to retail investors in a move to capture overseas investor sentiment which favoured Australia and New Zealand
Berry said the overseas investors were buoyed by both countries strong fiscal position relative to others and how each have handled the pandemic.
“The rest of the world at the moment is actually looking to Australian and New Zealand as safe havens, at a time of huge financial uncertainty.
“Obviously we are fortunate, particularly in New Zealand, to have the Covid-19 under control and we can try to keep the economy functioning.”
He said if there was a large, second wave of cases internationally it could lead to an increased flow of money into Australasia.
This article appeared on the RadioNZ website here