Democratising access to ethical investment

A leading responsible investment and super fund manager is making it easier for Australians to invest their money ethically 

Australian Ethical has launched its first exchange traded fund (ETF), as part of a plan to help democratise access to ethical investment. 

An ETF is a managed fund you can buy or sell on the stock exchange just like an individual stock. It combines a range of different assets – like shares – into one investment, allowing investors to easily expand and diversify their portfolio.

The High Conviction Fund ETF is an actively managed portfolio of 20 to 35 companies primarily taken from the ASX 300. 

Australian Ethical says each company in the portfolio meets the responsible investment and super fund manager’s rigorous Ethical Charter criteria.                                                                                     

While the original High Conviction Fund was launched by Australian Ethical last year, it was restricted to retail investors (at a cost of at least $25,000), or wholesale investors with at least $2.5 million in assets or an income over $250,000.                           

The converted ETF fund will be able to be bought on Cboe Australia – a regulated stock exchange – from Tuesday, offering investors a lower-cost way to access a large number of assets, which will be managed by Australian Ethical’s investment professionals and internal ethics team.

Australian Ethical CEO John McMurdo said the company’s investment team had a proven track record and expertise as part of Australia’s original ethical investor.

“We are extremely proud of having some of the highest standards in the market for both our ethical portfolio and financial returns,” McMurdo said.                                              

“Democratising access to ethical investment, through the release of products such as this ETF, is a very important part of our strategy.”

Mike Murray, head of domestic equities of Australian Ethical, told Pro Bono News that democratising access meant allowing people to invest in the ETF for as little as what a broker set as the minimum – typically around $500.    

“We’re really excited about making this accessible to more people, particularly because there’s more and more greenwashing out there. So we’re really excited about it,” Murray said.

“And I expect that we’ll see quite a few more listings of ETFs and ESG type ETFs in Australia just because they’re quite an elegant product design.”

Murray also believes the ETF will have broader benefits for the responsible investment movement in Australia. 

He said any new product that was authentic and true-to-label was good for the movement.

“And just from an accessibility point of view, [if it’s] easier for customers to access ethical investments that are simple and transparent, I think that helps move the industry forward,” he said.

“It’s a really exciting time to be part of the industry, and I expect there will be a lot more competition. 

“But in some ways that’s a good thing because it means there’s more and more people that are concerned about the impact that their money is having and want to align their investments with their values.”  

You can find out more about the fund here.