By Mohamed Ali Bernat NPI is to apply its socially responsible investment (SRI) model to all the un...
By Mohamed Ali Bernat
NPI is to apply its socially responsible investment (SRI) model to all the underlying assets of its ethical with-profits fund, which launches this week.
As reported by Investment Week earlier this month, the company is to launch a socially responsible with-profits bond as part of its launch of three investment bonds. It is aimed at investors attracted by the ethical investment but nervous about exposing their assets directly to equities. The ethical with-profits fund is made up of a ring-fenced portion of the group's Global Care managed fund.
NPI will offer customers who invest in the bond between October and 31 December a £100 donation to a charitable organisation. Investors can choose between Amnesty International, World Wildlife Fund for Nature, The Mines Advisory Group or Living Earth.
Mark Campanale, investment marketing manager for NPI's SRI product range, said low risk investors have been restricted to the choice of abandoning their risk profile to invest in a socially responsible fund or sacrificing their principles to invest in a non-ethical fund.
He said: "You might have an IFA who suggests putting 40-60% of their client's money into with-profits products with a smattering of other investments, which means most do not really get around to considering an ethical fund unless prompted by their client."
Campanale said research shows that more people would like to invest in SRI, which accounts for less than 1% of the retail market but is growing rapidly. NPI's £91m Global Care fund is ranked 1 out of 92 funds in the UK equity Income sector, with bid to bid returns of 9.9% compared to the average return of 4.6%. It is ranked 2 out of 91 funds over one year and 2 out of 83 funds over a three-year period. Over three years, on a bid to offer basis, the fund has returned 73.6% compared to the sector average of 31.9%.
He said: "The way we have positioned our new bonds, with three distinct products, we are confident they will appeal to a much wider audience than the traditional SRI market. Research has shown that 8% of the population have indicated they are ethically driven when it comes to investments and 14% say they are ethically interested."
Campanale said socially responsible investment was, first and foremost, an investment proposition which sought to predict the companies that would benefit from social and environmental change.
He said: "Businesses with the impetus to operate in a socially and environmentally responsible manner are well positioned to produce superior earnings growth, which should flow to investors as strong returns."
Campanale added that he was aware strong investment returns would be the bottom line for most investors regardless of how motivated by social issues they were.
"This fits in with our methodology, which is one of a specialist fund seeking to identify the industries of the future whose activities benefit from the shift to environmentally and socially sustainable economic activity."
Investment Week reported in August that NPI had lost half of its SRI team to CNGU and Campanale said they were looking to recruit five new staff to take the team back to around 12 people.
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