Australian Ethical has rolled out a new fund that invests in ethical fixed interest assets.
Known as Australian Ethical Fixed Interest Trust, the new fund will include a diversified portfolio of Australian dollar-denominated fixed rate investments that comply with the group’s ethical standards, according to Financial Standard.
The new fund will invest 41% in Australian Government bonds, 35% in corporate bonds that meet ethical screen, 18% in State Government bonds from Victoria, SA, NT and ACT and 5% in sovereign wealth bonds that meet ethical screen.
With funds under management of $125 million, the Fixed Interest Trust will not include bonds from NSW, QLD, WA and Tasmania as these States offer support to the mining and forestry industries.
David Macri CIO of Australian Ethical said: "Australians wanting to invest in ethical fixed interest assets can – for the first time – have access to a managed fund that aims to match or better the mainstream index via Australian Ethical’s Fixed Interest Trust (AEFI Trust)."
Benchmarked against the UBS Composite Bond Index, the new Fixed Interest Trust was initially seeded in 2012 with fixed income assets from the firm’s previously managed Australian Ethical Balanced Trust.
"While benchmarked against the UBS Composite Bond Index, our Fixed Interest Trust’s universe is considerably more discerning than a mainstream bond fund. For example, Commonwealth government bonds represent a little less than 40% of the Trust’s assets.
"The Trust does not possess an overarching thematic. Its aim is to provide a fixed income portfolio of medium term duration (currently 4.3 years) that resembles that of the UBS/Bloomberg AusBond Composite Index, while maintaining alignment with the Australian Ethical Charter," Macri added.