UK - Scheme fears over the performance of socially responsible funds have been allayed after one fund topped Mercer's latest survey of returns, SRI advocates believe.
Brandywine Asset Management’s global value equities SRI fund headed Mercer’s second quarter survey of 98 US global equity funds.
The firm produced a 29.9% return – 1.5 points above second-placed Brandes Investment Partners’ conventional global equities team.
Delaware-based Brandywine currently has $9.6bn (£6bn) in assets under management and is understood to follow a “close to zero tolerance” policy that filters out tobacco, alcohol, gambling, pornography and any companies that violate workers’ rights, women’s rights and the environment.
UK-based fund managers said the results showed that traditional reasons for not investing in SRI funds – primarily based on lower performance – no longer applied.
Jupiter Asset Management director and head of its “green” department, Simon Baker, said: “Since SRI came of age, you can no longer regard it as different from any other sector.
“SRI is well enough researched and broad enough that it no longer provides a drag on performance. For all but some of the most strict funds, the restrictions are no greater on an SRI fund than any other.”
UK Social Investment Forum executive director Helen Wildsmith said: “This has reopened the debate on what sort of SRI styles are appropriate for UK pension schemes.
“The latest academic analysis shows that risk-adjusted returns are no different for SRI funds, and we have examples of people coming top of performance tables as well.”
But Mercer global head of research Bill Muysken warned schemes not to read too much into the fact that an SRI manager had appeared at the top of its performance tables.
He said: “SRI managers can end up almost anywhere.
“Now and again, one will be at the top and another will be at the bottom. And if you look at this table, there is one near the bottom.”
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