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1 Jan 2018

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Value the Future

Contact a GOLD LEAF Financial Planner today.

Ethical Investment

Performance

Ethical Investments deliver great financial performance.*  

Ethical Investments (also known as Responsible Investments) continue to deliver great financial returns.  Core ethical investment Australian equities funds outperformed both the ASX300 and the average large cap Australian equities funds across one, three, five and 10 years according to the latest research from the Responsible Investment Association Australasia.(1)  The research also shows more people are choosing ethical investment with core ethical investment funds in Australia worth $51.6 billion at December 2015.

Ethical Investment is also known as Responsible Investment and combines financial analysis as well as environmental, social, governance and/or ethical criteria when investing. 

Core Responsible Investment (ethical investment) Funds Performance to 31 December 2015*

Appointments

For financial advice to help you reach your dreams.

Mandy and Scott's Vineyard Dream

Mandy and Scott always dreamed of buying a block of land not far from Melbourne with vineyards and starting a boutique winery.  They wanted to be close to nature and grow organic fruit and vegetables for their family.  A few years ago, Mandy received an early inheritance of $150,000 from her Grandma and she wanted to grow this money as a deposit on the vineyard. 

 

They met with a Gold Leaf Financial adviser who recommended an investment portfolio in a range of assets such as shares, bonds and listed property, that was in line with their values and that would grow over time.  She also recommended they add their savings of $900 per fortnight into the investment and when they received bonuses at work, use part of the bonus as a holiday and add part of the bonus into the investment portfolio. 

 

By investing a regular amount each fortnight, they were surprised at how quickly their investment grew.  They are now on track to having $400,000 to make their vineyard dream a reality.

Three Steps to
Ethical Investment

How to match your investments with your values

Research from Harvard University also shows strong performance. (4)

 

“We find that firms making investments and improving their performance on environmental, social, and governance (ESG) issues exhibit better stock market performance and profitability in the future.” - George Serafiem, Harvard Business Review (2) *

 

Research by Deutsch Bank (3), reviewing over 100 academic studies of sustainable investing around the world, shows companies with higher ratings for Corporate Social Responsibility (CSR) and Environmental Social and Governance (ESG) criteria are correlated with superior returns.*  This research also found that

“100% of the academic studies agree that companies with high ratings for CSR and ESG factors have a lower cost of capital in terms of debt (loans and bonds) and equity.  In effect, the market recognizes that these companies are lower risk than other companies and rewards them accordingly.” *

 

 

* Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.

References

1. Responsible Investment Association Australasia 2016, ‘Responsible Investing Benchmark Report 2016 Australia’.

2. Serafiem, G, Harvard Business Review 2015, ‘The type of socially responsible investments that make firms more profitable’ https://hbr.org/2015/04/the-type-of-socially-responsible-investments-that-make-firms-more-profitable accessed February 2017

3. Deutsche Bank 2012, Sustainable Investing establishing long-term value and performance.

4. Kahn, M., Serafeim, G and Yoon, Aaron, ‘Corporate Sustainability: First Evidence on Materiality, 2015’.

5. Friede, G., Busch, T. and Bassen, A, Journal of Sustainable Finance and Investment 2015, ‘ESG and Financial performance: aggregated evidence from more than 2000 empirical studies.’

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