Takapuna-based boutique manager, Pathfinder Asset Management, has signaled a new focus on sustainable investing with the launch of a retail version of its Responsible Investment Fund (RIF) – to be rolled out via a novel start-up direct investment platform.
The Global Responsibility Fund (GRF), which invests into the underlying wholesale Pathfinder RIF, is slated to go live on the Sharesies platform this week.
To date Sharesies, launched by a trio of former Kiwibank employees earlier this year, has only distributed a range of NZX-owned Smartshares exchange-traded funds (ETFs). According to its latest website update, Sharesies has attracted over 5,000 active members and $1.5 million since launching in June.
In a statement, Sharesies co-founder, Leighton Roberts, said the platform was responding to requests from investors for a responsible investment option.
“The Pathfinder Global Responsibility Fund approaches responsible investment in a way that is aligned to what Sharesies wants to be able to offer: simple, easy to understand, no-nonsense investment options,” Roberts said. “We are delighted to partner with Pathfinder for the Global Responsibility Fund launch to give access to more Kiwis.”
In May this year Pathfinder secured an almost $50 million mandate from Ngāi Tahu to seed the Responsible Investment Fund, which holds up to 250 underlying global equities screened through both positive and negative filters.
John Berry, Pathfinder director, said the retail GRF, to be available via Sharesies and financial advisers, fed into the same underlying environmental, social and governance (ESG) strategy.
Berry said the fund went beyond merely screening out ‘sin stocks’ – such as cluster munitions manufacturers, tobacco and adult entertainment providers – to give preference to companies with high ESG scores (as determined by third-party researcher Sustainalytics).
“We believe the investing public expects a more proactive, common-sense approach [to responsible investing] that is positive and goes beyond simple exclusions,” he said.
As well as the negative screens and ESG scores, Pathfinder overlays its own views on sectors, markets and regions to construct the ultimate portfolio of 250 equally-weighted stocks. Pathfinder will also target a currency hedge of 50 per cent for the GRF but could go “much higher or lower”, according to the product disclosure statement, which states the fund’s base fees at 0.3 per cent with a 0.63 per cent administration fee.
The launch of the GRF coincides with Pathfinder rebranding as “New Zealand’s first dedicated responsible investment manager”. Under the change, Pathfinder has put socially responsible investing as a core part of its investment philosophy.
The firm’s newly-inked statement of investment policy and objectives (SIPO) says: “We expect share prices of companies that score highly on environmental, social and governance (ESG) metrics to perform better than low scoring companies over long time periods.
“This may be explained through business advantages that improved ESG may provide such as:
- lowering reputational risk
- raising employee satisfaction (meaning greater productivity)
- increasing consumer engagement (meaning greater customer loyalty) and
- stronger corporate governance and oversight.”
With the GRF, Pathfinder now offers five retail products covering global strategies including the Water, Property, World Equity, and Commodity Plus funds.
