It’s been a tumultuous first half for 2022, with many predictions at the start of the year eventuating. Uncertainty will continue to plague markets for the rest of the year, but one thing we are more certain of is the continued integration of ESG factors into investment portfolios and the plethora of responsible investing strategies and that de-carbonisation is a key objective for businesses and governments around the globe. Investment capital has an important part to play in the transition toward carbon neutral. We question the narrow exclusionary approach required of Default KiwiSaver providers.
At the Research IP Fund Manager of the Year Awards in 2021 we shortlisted three investment managers that lead the way in responsible investing:
Responsible investing was upgraded to a major category for 2021, with the award recognising the investment manager that demonstrates the most commitment to responsible investing and its benefit to stakeholders. The winner of the Research IP Responsible Investment Manager of the Year for 2021 was Pathfinder.
Greenwashing and token signatories to either the UNPRI or bodies like the RIAA will no longer cut the mustard. ESG is not new. The focus of Research IP is the evolution to sustainability and impact, the transition to carbon neutral and the important role capital must play in keeping the lights on yesterday, today, and tomorrow.
Effective implementation of this by investment managers is easier said than done. There are a raft of approaches an investment manager can employ to invest responsibly. But how do you prudently evaluate an investment manager’s approach to responsible investing? Is the investment manager ultimately providing value for money?
Our research paper, Beneath the Surface of Responsible Investing, takes a deeper look at the investment merits of different managed fund approaches applied in New Zealand, Australia, the United States and Europe. We assess the application of the United Nations Sustainable Development Goals in an investment context, the Principles for Responsible Investment, and broader ESG considerations.
We believe independent, objective, and holistic analysis is required to understand the efficacy and nuance of different responsible investment strategies and how these relate to investors’ altruistic objectives. Independent research will give investors something to hang their hat on when evaluating which managed funds suit their objectives. This is particularly relevant for those Kiwis who end up in a Default fund and may wish to make an active choice and change to a different KiwiSaver provider.
The recent changes to the Default KiwiSaver funds require fund managers to now exclude investment in fossil fuels and illegal weapons.
Read the full article on interest.co.nz
To exclude or to manage?
Investment capital has an important part to play in the transition towards carbon neutral. A great example of the transition is the Danish company Ørsted. It was once one of the most coal-intensive energy companies in Europe. Today, they claim to be the world’s most sustainable energy company, and a global leader in the transition to green energy. This is a great example of where capital arguably should be directed, but appeared on many exclusion lists.
Capital allocation is a critical part of the transition, are crude exclusions the right approach?
To help make managed fund information more transparent, comparable, and accessible, we’ve developed the RIPPL Effect report. The RIPPL (Research IP Pty Ltd) Effect is freely available to financial advisers and DIY investors. Information on fees is provided on page 5 in every report.
The RIPPL Effect is designed to bridge the gap between our Quantitative Tear Sheets and full Qualitative Research Reports. The RIPPL Effect standardises data and information so it can be found in the same place in a report for all managed funds – KiwiSaver or investment fund.
Simple data points are collected and presented in the same place on every report. In particular key information typically found in the PDS, SIPO, or on the Fund Manager’s website, but often hard to find.
Where to from here?
Research IP currently has over 300 reports for managed funds available in the New Zealand market, as well as a range also available in Australia. The initial coverage also includes all default, balanced and growth KiwiSaver offerings. Coverage of funds and data points is expanding daily.
- The RIPPL Effect reports are also available on interest.co.nz
- You can find our research embedded at the point of sale on the new investment platform Flint Wealth.
- We announced a new partnership for Research IP in New Zealand with interest.co.nz at The RIPPL Effect – The future starts here – Research IP (research-ip.com)
Looking for something in particular or have some feedback? Please reach out to one of the RIPPL team
Research IP delivers high quality investment fund research and consultancy services to financial advisers, charities & NFPs and the broader financial services industry. Our experience spans well over 20 years working directly across the multiple facets of finance, so we understand the key drivers and challenges for managers, as well as the impact for investors and the broader industry.
We strive to give you the best information, so you can help your clients make better decisions, and feel more confident about doing business with you. We believe that not only can everybody win, everybody should.
Reach out to us today about your research and consulting needs, and how to make the data work for you, and your clients.
Would you like to see research on a Managed Fund, then enquire here
Photo credit: Buozaro.com
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