The $15 billion First State Super will roll out a new socially responsible investment (SRI) option for members in the second quarter and has appointed two Australian equities managers to provide the product.
The SRI option will be rolled out to members in May, and will be added to the 10 existing options offered by the fund, which include four pre-mixed and six individual asset class options.
Michael Dwyer, chief executive officer of First State Super, said more than 300 members had already expressed an interest in the option, which was flagged up in the newsletter that accompanied members’ six-monthly statements, sent out last week.
The fund’s 525,000 members were given the option of registering online via the First State Super website if they were interested in the product.
“We’ve been overwhelmed; there have been hundreds of members that have listed their names in a matter of days,” Dwyer said.
The option was being introduced in response to growing demand from members for SRI.
“We research our members regularly and over time there’s been a growing interest in this area of socially responsible investing,” he said.
“When we asked members whether they would like an investment product focused on the area of sustainable investing the answer was yes. We’ve now got to a stage where we’re going to launch that product.”
According to data from SuperRatings, 42 funds currently offer at least one type of SRI option, with Australian Ethical Retail Super Fund – Accumulation and Health Super Fund the only ones to offer SRI options across Australian shares, diversified, international shares, mixed shares and property.
The research firm’s second annual review of the superannuation sector found the percentage of funds that now provide access to an SRI option has jumped from 37 per cent in 2008 to 62 per cent in 2009.
Dwyer declined to name the two Australian equities managers that had been selected until members had been informed.
"We’ve looked at underlying investment managers and those that have screening processes in place to provide an SRI product – we’ve chosen those who we think are the best underlying combination of managers to provide our members with the best outcome,” he said.
The new option would be competitively priced, but SRI options tended to be “marginally more expensive” due to the nature of the product and the additional overlays, he added.