Trust Investments - International Share Fund screens out Tobacco and Controversial Weapons

September 2016

There has been significant recent media attention given to the fact that many KiwiSaver members, particularly those in government-appointed default schemes, are unwittingly investing in companies that manufacture cluster bombs and anti-personnel mines.

 

This is an unintended consequence of investing in index-tracking passive funds where the benchmark index covers, in a practical sense, the whole listed market without exclusion of any companies or industries.

 

Trust Management is committed to investing in an ethically responsible manner, provided that any additional costs and risks are reasonable and well understood. For example, the Sustainable Australasian Share Fund has an ethical screen, such that it does not invest in companies whose major business activities are tobacco products, alcoholic beverages, pornography, gambling, armaments or the production or extraction of fossil-fuels.

In terms of international assets, few New Zealand investors have the necessary scale to have a separately managed account with a customised mandate. Investment choices are therefore limited to the products offered by large international managers.

 

Ideally the Fund's international share investments would embrace the same sustainability criteria that are in place for its investment in the Sustainable Australasian Share Fund. In the international shares and fixed interest space, however, products of this type are generally small and actively managed, and have high management fees. 

 

However, we have now identified an indexed fund managed by State Street that excludes tobacco stocks and controversial weapons. The Fund maintains a good diversified indexed exposure with constituents of the Fund’s benchmark totaling 1,627 stocks compared to 1,645 stocks for the MSCI World Index.

The fee level of this Fund is slightly more expensive than the existing underlying indexed fund, however Trust Management as Manager of the Trust Investments Group Investment Fund, will absorb the additional management fees charged by the underlying manager.

Accordingly the underlying fund into which the Trust Investments - International Share Fund invests has changed effective 30 September 2016. For an updated Product Disclosure Statement, please click here.

Contacts

Grant Hope

Chief Executive Officer

09 550 4044

 

 

 

 

Shane Coward

General Manager

09 550 4045

 

 

 

John Williams

Investment Manager

09 550 4046

 

 

 

Under the Financial Markets Conduct Act this communication may be deemed to be an advertisement for an offer of units. Trust Investments Management Limited is the issuer of the units to be issued under the offer to which this advertisement relates. A product disclosure statement for the offer, which sets out the terms and conditions of the offer, is available, and can be obtained at www.trustmanagement.co.nz/investment-products.

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