Middleweight European fund manager Dexia is evaluating an Australian launch for its top-performing Stimulus global socially responsible investment (SRI) funds.
Based in Brussels, Dexia Asset Management has over A$140 billion in assets under management including about A$1.5 billion in SRI funds. Dexia claims to have taken a 5.3 per cent share of the European SRI market since May 1998 when it launched its Stimulus social funds.
In Australia Dexia owns 51 per cent of boutique fund manager Ausbil-Dexia and is considering opening a wholesale-only feeder fund that would give Australian institutions access to the overseas-managed Stimulus funds.
Ahead of a trip to Europe to discuss the plans, Ausbil-Dexias chief investment officer Michael Wilson said the funds point of difference in the limited Australian market for international ethical investments would be its high returns.
According to Dexia figures the Stimulus Accent Social fund achieved a three-year cumulative return of 25.5 per cent to April 30, 2002, compared to the benchmark MSCI World return of just 2.22 per cent.
Wilson said the Stimulus Accent Social fund is investment style-neutral not biased to either growth or value stocks and after screening on social criteria aims to broadly reflect the regional and sectoral composition of the MSCI benchmark.
Wilson said Ausbil-Dexia had not progressed to the stage of presentations to institutional investors but had been sounding out the market in the course of a number of meetings in recent weeks.
Its been viewed reasonably positively by most of the consultants and major super funds, said Wilson. Theyre interested in an absolute way, but theres not a lot of dollars in it. At the moment it doesnt look like there is the demand. Its early days in peoples thinking about SRI here.
Dexias Stimulus funds are screened by Ethibel, described as a Belgian non-profit independent research institute set up in 1992 to bridge the gap between the financial world and NGOs. Ethibel is a member of the worldwide Sustainable Investment Research International (SiRi) Group (which includes Australian outfit the Sustainable Investment Research Institute (SIRIS)).
The four major factors taken into account during the Ethibel screening process are internal social policy (working conditions, industrial relations, etc), external social policy (human rights, social investments, developing countries), environmental policy and economic policy.
Dexia also manages two other ethical investment styles. Dexias Cordius Allocation Sustainable funds are composed using the Dow Jones Sustainability index, with equities actively-traded against that index. Dexias Ethique funds are composed using scores from French SRI ratings agency Arese.