Ethical or ‘responsible’ investing has been slow to take off among Australian investors, but that could change in the wake of findings from the financial services royal commission.
According to analyst James Tayler of Morphic Asset Management, ethical investing will surge next year, even as global markets are predicted to face further turmoil.
Last year, AMP Capital divested itself of all investment in tobacco-related investments from its portfolios as part of a move to follow a “new ethical framework.”
But a report by Morphic has found Australia is well behind the United States, even as studies prove investing in ethical funds can deliver high returns.
Just around six per cent of global and Australian equity funds sold in Australia meet sustainable and responsible investing requirements, according to the report, compared to around 21 per cent in the United States.