Boom in investing with your heart
From social media to socially responsible – investing has changed,
SOCIAL media is helping to make Australian investors and super fund members more conscious about doing good things with their money.
People are eager to embrace feel-good financial products. Assets held in responsible investment funds have tripled in two years, and a new listed investment company – that donates part of its assets to charity – is set to debut on the Australian stock exchange early amid surging investor demand.
Novo Wealth adviser Paul Garner, a responsible investment specialist, said groups such as Australian Ethical Investment and Future Super had strong digital strategies that were helping to raise awareness.
Most big super funds now have socially responsible investment options, and people can invest directly in ethical managed funds and exchange traded funds targeting Australian and global assets.
Mr Garner said interest in responsible investing was coming from all age groups, from Millennials to rich retirees who wanted to do something positive.
“For Millennials, it’s a state of mind that they are more concerned about these things,” he said.
Traditionally, ethical investment options screened out unpalatable assets such as tobacco, gambling and weapons companies, but there is also positive screening of investments, plus changing views about what is and isn’t responsible.
“Coal, oil and gas firms were once good investments, but social media has blackened the coal industry,” Mr Garner said.
“Will social media concerns about sugar mean investment in the food and beverage sector will become an issue? There’s more choice. A growing number of investment funds have ‘ethical’ in front of them, but there’s light green and dark green.
The Responsible Investment Association of Australasia’s 2018 benchmark report says money held in “core” responsible investments – which involve positive or negative screening, sustainability and community finance – tripled between 2015 and 2017 to $187 billion.
They now represent 12 per cent of all professionally managed assets.
A fresh variation on doing good things with your money is the new Hearts and Minds listed investment company. It combines investment ideas from some of the nation’s top money minds, will forgo investment fees and instead donate 1.5 per cent of assets each year to medical charities.
This investment, to be known as HM1 on the Australian Securities Exchange, closed its initial offer early after attracting more than the $500 million it wanted, and will start trading on November 14.
HM1’s corporate adviser, Seed Partnerships, says it will support medical charities including the Victor Chang Cardiac Research Institute, Black Dog Institute and The Charlie Teo Foundation.
Seed Partnerships partner Will Spraggett said people were inherently charitable but often required an opportunity to ‘unlock’ that charity.
“Social media and the internet has made it easier for investors to make more informed investment decisions that fit their ethical and social profile,” he said.
“In turn, this has helped investors think more about where their money goes.
“People ultimately invest to make money, but many see the additional feature of giving back to society – whether it be through ethical investments or charitable investments vehicles – as a bonus.”