Lonsec assigns ratings to Aus Ethical funds

Yasmine Raso

Senior Journalist, Financial Newswire

3 November 2022

Research and ratings firm, Lonsec, has awarded a ‘Recommended’ rating to four funds from Australian Ethical, indicating a “strong conviction the financial product can generate risk adjusted returns in line with [its] relevant objectives”.

The four funds that received the new rating included the Australian Shares Fund (Wholesale), Emerging Companies Fund (Wholesale), Australian Shares SMA Portfolio and the High Conviction Fund (Managed Fund and Exchange Traded Fund (ETF)).

Mike Murray, Australian Ethical’s Head of Domestic Equities, said the firm is pleased about Lonsec’s evaluation of its funds, especially with the inaugural rating of the High Conviction Fund.

“Australian Ethical’s High Conviction Fund is managed using the same team and research process as our other active domestic strategies, with a focus on mid and larger capitalised industrial companies that meet our strict Ethical Charter,” he said.

“Importantly it is also available as an ETF under the ticker code AEAE, meaning that it can be bought on an exchange like ordinary shares, further expanding the range of choices for committed ethical investors.

“Lonsec stated a ‘strong level of conviction in Australian Ethical’s investment team’, while also noting the ‘invaluable support provided by Dr Stuart Palmer and our Ethics Research Team’, who offer ‘real-time detailed research and engagement with companies on ethical matters’.”

In its rating of the funds, Lonsec said Australian Ethical was “a credible, true-to-label ethical investment manager that has delivered strong performance over medium and longer terms”.

The rating for Australian Ethical’s Australian Shares Fund (Wholesale) was also the fourth consecutive ‘Recommended’ score for the fund, as the ratings house noted it achieved “decent outperformance over the medium- to long-term, despite recent headwinds”.

“Pleasingly, Lonsec has also given our Australian Shares SMA Portfolio a ‘Recommended’ rating, which is a strong result following the Fund’s launch in March 2020,” Murray said.

“This is an actively managed, concentrated product that invests in a portfolio of 15-30 companies selected from our flagship Australian Equities’ products. Overall, Lonsec views the strength of our commitment to ESG integration to be ‘stronger than our peers’, given our ‘strong policy framework and clear public positioning’.

“Our vision is for a world where capital is always invested ethically in pursuit of this vision, and we now offer a range high quality and performance-focused options in active domestic equities that are both accessible and true to label, with a focus on positive long-term outcomes for the planet, people and animals.”