Fund names mean little in ESG investing
You can’t judge a book by its cover and you can’t judge an ESG fund by its name – that is one of the clear take-outs from the latest Evergreen Responsible Investment Grading Index.
The index, released by research house Evergreen today, has generated the following results:
| 1m | 3m | 6m | 1yr | Ann. 3yr | ERIG Quartile Ranking | |
| Ausbil Active Sustainable Equity Fund | 2.77% | 2.70% | 9.79% | 19.75% | 21.13% | 1 |
| Australian Ethical Australian Shares Fund | 2.96% | -1.12% | 4.97% | 14.21% | 20.28% | 1 |
| Alphinity Sustainable Share Fund | 2.90% | 3.42% | 6.26% | 20.60% | 18.44% | 1 |
| Aberdeen Standard Focus Sustainable Australian Equity Fund | 1.10% | 3.32% | 8.78% | 23.91% | 17.53% | 1 |
| 8IP Inspire Australian Equities Fund | 1.83% | 0.69% | 3.58% | 9.39% | 15.63% | 1 |
| Pendal Sustainable Australian Share Fund | 2.91% | 3.41% | 5.96% | 19.37% | 15.61% | 1 |
| BetaShares Australian Sustainability Leaders ETF | 2.00% | 4.25% | 6.96% | 17.62% | 14.65% | 1 |
| VanEck Vectors MSCI Australian Sustainable Equity ETF | 3.41% | 5.41% | 7.04% | 18.36% | 14.60% | 1 |
| Pendal Horizon Fund | 2.21% | 2.99% | 5.24% | 18.03% | 14.34% | 1 |
| Dimensional Australian Core Equity Trust | 3.51% | 3.65% | 5.51% | 18.93% | 14.26% | 1 |
| ASX 200 | 2.75% | 2.09% | 3.84% | 17.23% | 13.62% |
ERIG Index founder, Angela Ashton not that one particular first quartile fund manager’s sustainable equity fund outperformed the benchmark by 7.5% a year over three years, while the ETFs in the top ten also outperformed by 2% a year.
“Fund managers that are not necessarily known for their ‘sustainable’ or ‘ESG’ products have scored similarly well in terms of performance and Responsible Investment scores, highlighting that we must look beyond the name and instead at the actual intention and actions of a fund manager. Not just to avoid greenwashing, but to find gems as well.”
“We are beginning to see the rise of Responsible Investment being woven into the standard practice of fund managers and this essentially results in best practice. Best practice sees long term sustainability and long-term returns delivered simultaneously,” Ashton said.
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