Australian Ethical – best international equities fund

Did you know that permaculture pioneered the ethical investments movement in Australia? Also permaculture inspired and supported the early formation of Australian Ethical, which recently (October 2014) was named the Best International Equities fund by the Australian Fund Manager Foundation. Australian Ethical beat finalists Perennial and Platinum, becoming the first ethical investment specialist to win the prestigious award.

How it all began:

Back in the early 1980s, Damian Lynch did a PDC with Bill Mollison, who in the final days of the course spoke about turning our money around from being a tool of destruction to funding the solutions. This resonated powerfully with Damian, who had a degree in economics, to return to Sydney and with a group of friends set up Australia’s first ethical investment company, August Investments Pty Ltd.

A few years later, as a young permaculturist, I attended the first International Permaculture Convergence where the topic of sustainable economics and ethical investment was an important thread under discussion, and I volunteered to bring key people together in Sydney to invigorate the Earthbank Society.

In 1986 we held the first Earthbank Conference in Sydney, which brought the concept of ethical investments into the mainstream with articles in Ridges, The Australian, and an interview on the popular ABC radio Margret Throsby program. Soon August Investments P/L was fully subscribed, so Damian established the August Investments Fund as a trust, which grew so rapidly that Damian was feeling somewhat overwhelmed by the responsibility of managing millions of dollars. He found good people with the financial skills and ethical commitment to take over the management of the fund, and was subsequently relocated to Canberra and renamed “Australian Ethical”.  It has continued to grow from strength to strength and now offers a diverse portfolio of ethical investment and superannuation options.

Far from being risky, ethical investments have remained strong financially and delivered excellent returns to their investors — which supports another Bill Mollison saying that “we can make money doing good”

As reported in the Financial Standard October 15, 2014:

The fund returned 25.7% for the year ending 30 June 2014.

Australian Ethical chief investment officer David Macri said: “Our focus on finding good ethical investments within the ‘smart energy’ theme has delivered superior performance for our investors.

“We strongly believe that the world will align priorities to combat the risks of climate change, which will present investors with some great opportunities. We are proud to have been recognised by our peers and this award is a real testament to our process and Nathan Lim’s ability as a portfolio manager.”

Australian Ethical has remained true to their ethical charter and responsive to investor concerns. Several years ago they invested in CSG, having been convinced by the industry’s spin of what an important ‘clean’ transition fuel it represented. When investors found out they alerted Australian Ethical and provided factual information to support their concerns, upon which Australian Ethical promptly withdrew (divested) from CSG portfolios.

Permaculture encourages us to go beyond simply divesting from destruction. While we fully support the divestment movement as an important step forward, we need to be more proactive and consciously invest in enterprises, industries, products and services that are based on solution processes and ensure that money, as a resource, supports a more sustainable world.

Congratulations Australian Ethical, and may this recent recognition inspire more people with the confidence and courage to divest from destruction to invest in regeneration and sustainability.

 

Robyn Francis

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