Ingredients for a sustainable investing edge (Hint: forecasting inflation isn’t one)

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Livewire Markets

Australian Ethical is a pioneer in responsible investing. The firm's flagship Aussie equity strategy follows a strict ethical charter and has been running just shy of three decades. A quick performance review shows that focusing on well-managed companies delivering positive change can also provide an investment edge.

AusEthical's Australian Shares Fund, which uses the ASX300 as a benchmark, has comfortably outpaced the index over rolling 3-year, 5-year and 10-year periods and has returned 10.6% per annum after fees since inception in 1994.

We asked Mike Murray, head of domestic equities at Australian Ethical, if the firm has used recent volatility to make material changes to its portfolios.

"The answer is no. And that has to do with the way we manage money … We don't think we have an advantage within the domestic equities team in terms of trying to forecast inflation."

Murray says the firms 'edge' lies in finding companies with three key ingredients.  

  1. A sustainable business model 
  2. That business model must 'make sense'
  3. And the stock needs to be priced at the right levels

In this short video, Mike discusses the firm's investment philosophy and shares one stock that he believes looks 'interesting' after the recent volatility. 


Introducing Australian Ethical's first ETF

Australian Ethical started investing ethically in 1986. 36 years later, it is now easier than ever to invest ethically. Their first ETF, 'AEAE' gives you access to a focused basket of stocks from the S&P ASX 300, actively managed by their award-winning team from both an ethics and investment perspective. It is a High Conviction active ETF, giving you the added flexibility to buy or sell whenever you like.

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