Ethical investing is a growing trend and one KiwiSaver Scheme believes its Responsible Investment Association Australasia (RIAA) certified socially responsible investment (SRI) funds will drive business.
Grosvenor’s two SRI KiwiSaver funds became the first to gain certification under the RIAA’s recently revamped certification standards last week.
SRI funds, which don’t invest in companies that trade in such things as alcohol, tobacco, gambling and fossil fuels, have been around for a while.
However, as the global drive towards more ethical practices is growing, so too is the desire among some investors for such practices and funds.
Grosvenor chief executive David Beattie said they have had a very positive response to their SRI funds and he would expect that to increase with the RIAA certification.
“A particular subset of investors is dedicated in wanting to follow their ethical beliefs through into their investment practices.
“We think this certification will encourage such investors.”
Investor interest in SRIs has grown significantly since fossil fuel companies have been filtered out, he said.
After applying fossil fuel filters to their funds, 30 companies were dropped off the Grosvenor SRI funds register.
“There has been a good response to that. Such SRI strategies are only getting more popular and more attractive to investors.”
Beattie added that, on a broader scale, many investors are still getting their head around ethical investing.
“But both our analysis and RIAA analysis show it a growing trend globally.
“So we are optimistic that growing numbers of New Zealand investors are going to be attracted to SRI funds.”
Grosvenor is the only KiwiSaver provider with SRI funds certified by the RIAA. It already has three RIAA certified “Investment Series” SRI funds.
The RIAA, which is an Australasian body, is building its RIAA certified product list into a fund-finding web tool that is scheduled for launch in mid-2016.