The decision to launch the funds was based off an increasing demand from customers who want to put their savings to work to give the world a better future, but still want solid long term returns.
ASB’s executive general manager private banking, wealth and insurance Adam Boyd says, “these funds are a great option for those who want more than our broader approach to responsible investment and are willing to accept a different financial outcome as a result. This means our customers can choose to have their values play a larger role in determining where their money is being invested.”
“Because everyone has different ideas about what is and is not responsible, it’s important to offer choice. That’s why we decided to offer these funds alongside our already available KiwiSaver and ASB investment options. The ASB Positive Impact Funds are designed for those who want values-driven investing, alongside returns,” says Boyd.
The ASB Positive Impact Funds are structured as a typical balanced fund with 40% invested in income assets such as bonds, and 60% growth assets such as shares in globally focused companies. The funds won’t hold any investments in companies with significant business activity involving fossil fuels, alcohol, tobacco, gambling, controversial weapons, whale meat and adult entertainment.
“We wanted the funds to be suitable for a large portion of our customer base. Our goal is to continue helping customers reach their savings and investment goals – whether that’s buying their first home or saving for retirement. They just also want to know that their money is making a difference,” Boyd says.
The funds’ 40% income asset allocation is achieved through investment in the Vanguard Ethically Conscious Global Aggregate Bond Index Fund (hedged). The remaining 60% of the funds’ assets are invested in international equities through the Mercer Socially Responsible Hedged Overseas Shares Portfolio.
The underlying managers of the Positive Impact Funds will incorporate environmental, social and governance criteria into their investment decision making procedures.
Impact investing is a growing area, where investments are made with the intention to generate positive and measurable social and environmental impact alongside a financial return.
Approximately 35% of the growth investments held will be in companies who are actively making a social or environmental impact through their actions, particularly those that align with the UN’s Sustainable Development Goals.
These companies span a range of industries including waste management companies aiming to reduce landfill use, education providers improving schooling in poorer parts of the world, organisations focused on renewable, sustainable energy and affordable housing suppliers.
“The work that some of these companies are doing to create sustainable businesses that also make a difference in the world is inspiring, and we’re excited to be able to invest in them and share some of those stories with our customers who choose to invest in this fund,” Boyd says.
“While our team strives to achieve great outcomes, helping accelerate our customers’ progress financially and achieve their investment and savings goals, we realise it is equally important to our customers that they are left in no doubt about the way we invest, including our approach to Responsible Investing,” Boyd says.
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