SRI funds about to get a new addition

Oil’s taking it on the chin at the moment trading at seven-year lows and that’s got advisors and clients thinking about divesting of their fossil fuel holdings for companies more environmentally responsible

SRI funds about to get a new addition
NEI Investments filed a prospectus in late November for the NEI Environmental Leaders Fund, a fund that takes socially responsible investing to the next level with an investment mandate that includes being fossil fuel-free, something clients increasingly are asking of their advisors.
“I’m optimistic about this product coming out. It sounds on the surface to be good. What I like about it is it’s one more SRI fund that is now I understand going to be fossil fuel-free that’s available to my clients,” said Georgetown advisor Ryan Colwell. “In the mutual fund world this is the third fund that is completely fossil fuel-free.”
The other two fossil fuel-free funds in Canada being the IA Clarington Inhanced Global Equity SRI Class, which is completely non-carbon and the AGF Global Sustainable Growth Equity Fund.
“This fund sounds like a lot like the AGF fund which is a thematic fund. At least it appears to be. Instead of “not investing in things it’s pretty much investing in solutions such as green energy, wastewater pollution, etc. That’s what AGF’s doing,” said Colwell. “NEI’s fund sounds very similar. It’s very exciting because people really resonate with the AGF product. [However] It’s a little expensive so I’ll be really happy if there’s something similar with a cheaper fee. AGF is like 3%-plus.”
Certainly it’s an opportune time to introduce a fossil fuel-free fund given oil prices are sitting near seven-year lows.
Details are still sketchy but here’s what we know about it NEI’s Environmental Leaders Fund.
The portfolio manager (sub-advisor to NEI) is Impax Asset Management which has $4.78 B in AUM. They have been operating since 1998, with offices in London, Hong Kong, New York and Portland Oregon. The prospectus states that it seeks to achieve sustainable returns over the longer term by investing globally in companies active in the growing resource optimization and environmental markets.

To sum it up they’ll be investing globally in companies involved in resource optimization. What this means is they’ll be investing in companies with solutions to the world’s problems rather that divesting of those companies doing damage to the world.

If you’re in to SRI funds, NEI is adding to your pool of candidates and in this case, reasons Colwell, it’s a good thing.