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.
The information in this blog post is general advice and does not consider your individual objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement a copy of which is available from your financial adviser or AAN Asset Management. Should you have any questions please contact your adviser.