Hostplus has joined a growing cadre of super funds that offer a socially responsible investment option.
The $22 billion super fund for the hospitality, tourism, recreation and sport industries launched the SRI option on March 28, 2017, after six months of development.
The management of the option has been outsourced to the AMP Capital Responsible Investment Leaders Balanced Fund. The RIL Balanced Fund is certified by the Responsible Investment Association of Australasia and has given total returns after fees of 5.89 per cent over three years and 10.26 per cent over five years.
In a statement, Hostplus said the SRI option combines traditional performance metrics with environmental, social and governance criteria to identify investments that meet acceptable standards in areas such as environmental and social impact, ethical considerations, labour standards and corporate governance.
“We prefer to engage, rather than divest; however, there is the possibility that there are Hostplus members who may not prefer our view,” Hostplus chief investment officer Sam Sicilia said. “So we have created an SRI option and provided more choice.”
Based on member engagement with Hostplus’s 20 other options, Sicilia expected there to be relatively little take up of the option, compared with the balanced fund.
“Having said that, there are things that are upper-most in people’s minds today, such as carbon or tobacco or fossil fuels,” he added.
The increasing popularity of socially responsible investments can be seen at retail fund Australian Ethical. The fund has experienced rapid member inflows that have helped it more than double its assets over three-and-a-half years.
At December 2016, Australian Ethical had $1.84 billion in funds under management across superannuation and managed funds. This was up from $708 million at June 30, 2013.
AustralianSuper, First State Super, QSuper, Media Super, WA Super, and Australian Catholic Super are among the super funds that already offer SRI options.