In a statement, it said tobacco products had been excluded because they were highly addictive, could not be consumed safely and affected non-users via second-hand smoke.
That means about $471 million worth of tobacco equity and fixed-income holdings will be divested from AMP Capital’s portfolios. That is currently held in the global equity and global fixed income funds held by external managers on behalf of AMP Capital's multi-asset group.
Investors who are affected by the move will be notified. The managers of impacted portfolios will be instructed to progressively sell down their holdings of excluded securities in a reasonable manner. AMP Capital said this might take up to 12 months from time of formal notification.
AMP Capital’s New Zealand funds have already divested of cluster munitions, landmines and nuclear weapons in response to specific New Zealand legislative requirements.
Chief executive Adam Tindall said: “The new framework complements our existing approach to addressing ESG investment risks by helping us to resolve complex moral and ethical issues as they arise. It reflects the changing attitudes of our investors, who increasingly do not want to be invested in harmful products.
“It’s important to note we are only excluding certain companies or sectors by exception. AMP Capital still firmly believes in company engagement in order to effect meaningful change. In the case of tobacco, however, no engagement can override the inherent dangers involved with these products.
“We can meet our fiduciary obligations to investors and be a responsible fund manager, delivering strong investment returns that continue to meet client objectives. Our analysis has found that our funds can continue to be managed effectively under this new framework without compromising investment objectives.”
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