When it comes to how investors assess a company, the days of looking only at financial performance and shareholder returns alone are dwindling. There is now increasing scrutiny of corporate culture and governance, as well as how businesses engage with staff and customers, and their environmental impact.
In fact, companies that commit to addressing these urgent issues are positioned for greater business opportunities in the future, thus potentially being able to achieve higher returns for their shareholders.
Whilst there is mounting evidence that addressing ESG issues is not at the cost of sacrificing financial performance, it has often been difficult to build sustainable portfolios due to the variety of labels used by managers, and approaches to ethical investing. What is an ethical investment to one manager, might be called an ESG, Sustainable or Impact Investment by another.
For an adviser to build a diversified portfolio of assets that are managed in an ethical or sustainable manner, using a variety of different styles with commonality of ethos has proven to be challenging.
A Sustainable Growth Model to meet the needs of our clients
At AAN we have been receiving more and more requests from advisers for a diversified growth model that would align with our clients desire for a sustainable portfolio but also meet our requirements for transparency, liquidity and common-sense investments.
“We couldn’t find an existing model that met all our needs, so as a result of 12 months analysis and due diligence, we’re excited to launch the AAN Sustainable Growth Model. This now brings the models we manage for advisers and investors to six. The AAN sustainable investment model has been created for advisers and investors that wish to access a well-researched, best of breed portfolio of growth assets that aligns with client’s preference for sustainable investments with the view of making a positive contribution to society,” says AAN Investment Committee Member, Marshall Brentnall.
Transparency and clarity around what the assessment criteria and excluded industries are for this particular model was important to us. As it is for all the models we manage. So we’ve created a Sustainability Investment Policy document that provides details on this. An additional benefit for investors seeking transparency is the inclusion of an ethically managed Australian shares SMA in the model.
“We’ve designed this model for advisors looking for a complete sustainable or ethical portfolio solution for growth-oriented clients, or for retirees wanting a portion of their portfolio to be managed in a sustainable way. Different approaches to sustainable investing are used by a number of managers, with the expectation of more consistent returns and reduced risk” said Brentnall.
If you’re interested in sustainable and ethical investing, you should seek out a wealth manager who is knowledgeable in this area. So they can help you invest in a way that aligns with your values and focuses on optimising your financial return.
This article has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before acting on any of the information included in this article you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Any references to past investment performance are not an indication of future investment returns. If you are a retail client this article will not be suitable for you, please discuss with your financial adviser. Prepared by AANAM ABN 37 609 544 836; Authorised Representative number 1238848 of AAN, ABN 13 602 917 297 AFSL 472901.