A guide to Socially Responsible Investment
What is Socially Responsible Investment (SRI)?
It’s an investment approach that screens for good and bad investments. It works to reduce risks by assessing Environmental, Social and Governance (ESG) factors.
A way to manage and minimise risk - SRI funds avoid companies with questionable practices and reduce risks before they cause reputation and bottom line damage.
Promote positive change- As an investor this is a chance to invest well and be a force for good.
It makes financial sense- We believe that a portfolio of high performing ESG companies operating responsibly will help deliver strong returns and be better positioned to perform over the long term.
Why the Quaystreet Socially Responsible Investment Fund?
The Fund is actively managed and constructed of carefully selected socially responsible investments.
According to Andrew, “if you can’t understand a business, you shouldn’t be investing in it. That’s a pretty simple investment philosophy for us.” Using traditional research and analysis, there is a relentless focus on the selection of quality businesses with sustainable business models and margins. “Ultimately we look for companies which operate in growing markets with potential to grow their market share” adds Andrew.
Investing in ‘sunrise’, rather than ‘sunset’ industries, with future growth potential is a key factor to deliver performance according to James Ring.
It’s clear that QuayStreet understands how to size its investment positions. “We’re constantly looking at where we are on the risk curve, to ensure we take on enough risk to maximize returns but still stay within the set risk range for each fund” says Andrew.
Not afraid to take a larger position in a stock if they like it, they’re also very aware that “things can go down as well as up” which generally means even the best investment ideas are purchased over a period of time, not all at once.
In a tight knit and nimble team, experience also counts.
Andrew has chalked up more than two decades as an investment manager while James has had more than thirty years in the industry.
Both have probably researched, bought and sold most of the listed securities in the Australasian market a couple of times over during their careers, and they have also been through the roller coaster of several investment cycles. “We’ve had three or four up and down cycles in the last thirty plus years so we think we’ve got quite a decent skill set to navigate both types of markets” says James.
Since its inception five years ago, QuayStreet has experienced rapid growth with the funds under management nudging $900 million. It’s a figure which James believes is “very scalable” given their investment experience in managing much larger sums - and the relationship with parent Craigs Investment Partners.
“We get the best of both worlds, being able to operate with Craigs providing both administration and compliance resources, whilst we focus on what makes us tick - assessing stocks and markets to provide the best outcomes for our funds” concludes Andrew.
*According to Sorted Smart Investor and FMA KiwiSaver Tracker online tools.