The decision last week by AMP Capital, Australia’s second largest fund manager with $130bn under management, to dump nearly $600 million worth of investments in big tobacco, cluster munitions and landmines after overhauling its ethical guidelines, has reignited the debate about ethical investing. Can you invest “responsibly” and be rewarded, or at least, not be penalised for choosing investments that meet various ethical criteria?
Well, according to the Responsible Investment Association of Australia, you can. In fact, they argue that core responsible investment funds have outperformed large cap Australian share funds over most time periods.
As ethical questions are by nature open to interpretation, this article looks at how the industry is defining “responsible investing”, the performance of core responsible funds, and some investment options, either through managed funds or exchange traded funds.