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Ethics in investment rewarded
In recognition of investment funds that screen out companies in the alcohol, tobacco and gaming industries, the BT Ethical Share Fund has been named the Ethical Fund of the Year at this year’s Australian Sustainability Awards.
Nominees for the Ethical Fund of the Year Award category were judged according to a range of criteria that were based 50 per cent on performance and 50 per cent on the sustainability screening employed by the eligible funds.
The BT fund was selected because it displayed strong performance over the year and successfully screened out company stocks that did not align with sustainability and ethical criteria, including an exclusion of companies engaging in the alcohol, tobacco and gaming industries.
Within the institutional space, the fund is offered by a number of not-for-profit superannuation funds, including those offered by some Australian churches. It is also open to retail investors.
The BT Ethical Share Fund accounts for around 3 per cent of the Australian equity funds held by the fund manager, delivering a 29 per cent return over the 2005-06 financial year, with around $100 million in inflows.
According to Troy Angus, BT portfolio manager, some of the company stocks within the portfolio that contributed significantly to the performance were Telstra, ANZ, AMP, Brambles, QBE, Transurban and BHP Billiton.
He said around 10 per cent of Australian company stocks are effectively screened out of the portfolio, with the remaining 90 per cent subject to the same selection criteria BT applies across all of its funds.
When asked if there was much variation between BT’s Ethical Share Fund and its other funds, which have also been strong performers of late, he said there was “a reasonable variation”, citing Coles Myer as one company that was automatically disqualified from the fund because of its gaming interests.
Also in contention in this category were the ethical funds offered by AMP, IOOF, Perpetual and Suncorp-Metway.
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