Ethical Partners has developed a proprietary in-house lithium demand / supply model which indicates the global market is moving rapidly back into balance. But before we explain why we believe this to be the case, some background and context is necessary.
In line with our commitment to address natural capital risks, opportunities and impacts in our investment activities, Ethical Partners have increasingly engaged with portfolio companies on their nature-related issues and advocated for policy and regulatory frameworks to drive improved outcomes for nature and biodiversity.
Ethical Partners are pleased to see Australia take the next steps to implement mandatory climate reporting with the release of draft climate standards, which we provided feedback on.
The Ethical Partners Australian Share Fund (Fund or EPASF) finished 2023 up 13.05%, outperforming the S&P/ASX 300 benchmark by 0.92%. A pleasing outcome in a volatile year.
Ethical Partners have continuously called for the provision of high quality, comparable data on company’s climate governance and carbon metrics, which we believe is imperative for investors to fulfil the potential of responsible investment.
Ethical Partners have been proud to have been active supporters of the TNFD Forum over the past few years, and to provide regular feedback on the development of the official TNFD recommendations, which were launched in December, as well as to be active members of the RIAA Natural Capital Working Group.
Ethical Partners was proud to be a signatory to the Share Action letter to the UK Financial Conduct Authority regarding the Consultation Paper on Diversity and Inclusion CP23/20 in December 2023.
Westpac is the first major bank to put a Say on Climate to its shareholders
In accordance with Ethical Partners Voting Policy we pre-declare our ESG Voting for NAB’s upcoming AGM.
The Ethical Partners Australian Share Fund lagged the market during the quarter but the Fund has returned 14.17% for the last 12 months, outperforming the market by 1.25% (after fees), whilst on a 3 year basis the Fund is up 11.14% (+0.4% vs the market, per annum after fees)
There is continued momentum and broadly increased understanding of ESG issues across most of the wider ASX company landscape. Full 13 page report attached.
Ethical Partners is proud to share our support of a First Nations Voice to Parliament, protected by the constitution, aligning with our long-standing commitment to supporting Indigenous Rights in our investments, engagement, and advocacy.
Over the past few years, Ethical Partners has engaged strongly with all major listed Australian Banks regarding their fossil fuel exposures, financed emissions and decarbonisation targets and disclosures. This has occurred in many ways - through our targeted, deep, and regular engagements with their executives and boards, through our voting for all recent related shareholder resolutions with the banks and through collaborative letters with several other Australian Investors to their boards. More details on these engagements can be found in our stewardship reports, the most recent of which can be found in our Engagement and Stewardship Report (page 12) available in the Major Reports section of our website.
Ethical Partners is pleased to be ranked No.7 (of 69) over the year to June 30, 2023 in Morningstar’s Australian Equity Sector Institutional Survey for FY23.
Recession is the topic du jour given the backdrop of rising interest rates, volatile commodity prices and geopolitical tensions. Prima facie a portfolio stacked with defensives (even if expensive) and large caps appears to be a sensible course of action, however, following the crowd rarely leads to above market performance. We believe the macro is inherently unpredictable and as such constructing a portfolio based on a macro view is unlikely to be a source of sustainable investment outperformance.
In a busy period for the Sustainability Team we have recently attended four conferences and round tables with a diverse focus from Circular Economy to Modern Slavery.
Ethical Partners commends the Australian Government on its announcement of the new Net Zero Authority, established from the 1st of July which is something that we have long advocated for and believe is a very positive development.
Ethical Partners has been pleased to see the momentum in climate related financial disclosure policy both globally and in Australia over the past few weeks.
The Ethical Partners investment process is centred on financial discipline and the identification of sustainable businesses. We wrote back in November 2018 about the rapid growth in Buy Now Pay Later (BNPL) consumer credit growth and how this was an emerging social risk, an example of an unsustainable business model and an inflator of retail earnings. Now seemed like the right time to write a follow up piece.
The EPASF finished the 2023 Financial Year up 20.82% compared to the benchmark S&P/ASX 300 Accumulation Index up 14.40%, equating to outperformance of 6.42%. For the June Quarter, the Fund finished higher by 2.90% versus the benchmark which finished up 0.99%, the Fund outperforming by 1.91%.
Ethical Partners was pleased to make a submission to the recent Parliamentary Inquiry into Australia’s Human Rights Frameworks, calling for the enactment of a Federal Human Rights Act, as also advocated for by the Australian Human Rights Commission.
While much has made of the fact that Build to Rent residential (BTR) can help solve Australia’s housing shortage, one of the main benefits of the growth of the BTR sector in our view, is the ability to quickly and efficiently ramp up the provision of affordable housing in Australia.
Episode 25 of the Good Investing Podcast offers insights into how the team saw Q123 and what its outlook is for the year ahead. Special focus: Resources positioning, including how the lithium supply chain works; M&A; an enduring active asset management advantage and two key companies.
The Ethical Partners Australian Share Fund (EPASF) finished the March Quarter 2023 up 5.04%, outperforming the benchmark by 1.70% (net of fees). Financial Year to Date, the EPASF is up 17.41%, outpacing the benchmark by 4.13% (net of fees). This outperformance was driven by overweight positions in General Industrials and Consumer businesses, whilst being underweight Energy also aided performance.
Ethical Partner’s ESG portfolio analyst, Georgina Murray was a participant in an investor mining tour in Western Australia last week, during which she was able to meet with three ASX listed mining companies, IGO, Bellevue Gold and Liontown Resources. Georgina also donned her hi vis vest to tour two operational sites (IGO’s Nova nickel project and Bellevue Gold’s mine construction).
Ethical Partners Funds Management welcomes the recent announcement that a deal has been struck to secure passage of the Safeguard Mechanism Amendment Bill through Parliament. In this note we explain what the Safeguard Mechanism will do and why we believe the Ethical Partners Australian Share Fund is well placed given the transition risks faced for certain types of companies impacted by the mechanism.
Ethical Partners’ investment principles rely on a thorough fundamental company by company bottom-up analysis. Given the current challenging economic environment this is especially true in the retail sector, where over the last few years, some companies relied on enhanced Covid sales without bolstering their business, while others put reinvestment strategies in place for when those sales started to dissipate. We review six retail companies and their execution strategies below.
AI. Chat GPT. Love it or hate it….it’s really making an impact, and plenty of conversation of late. The potential for AI to accelerate green technology “tipping points” has been noted in a recent report by the London School of Economics Grantham Research Institute (GRI)
Ethical Partners was pleased this month to attend an invitation-only ASFI panel event on the political, financial, and industrial dimensions of the Safeguard Mechanism reforms.
Ethical Partners provided a submission to the Australian Government Treasury consultation on Climate Related Financial Disclosures. In our submission, we expressed our strong support for the Australian Government’s commitment to introducing mandatory climate related disclosure standards as a key pillar of its sustainable finance agenda.
The Ethical Partners Australian Share Fund (EPASF) finished the quarter up 7.9%, slightly behind the broader market which finished up 9.1%. Pleasingly, Financial year to date the EPASF is up 11.8%, representing 2.2% outperformance versus the S&P/ASX 300Accumulation Index benchmark.
In this 40 second grab, we talk about how general market risk can be very different to specific company risk and the ability to invest on the back of poor market sentiment.
In this 120 second grab, Nath digs deeper into what quality actually means... through the cycle performance, the importance of the balance sheet, higher margins, and acquisitions.
Ethical Partners was pleased to recently make a submission to the 2022 Australian Modern Slavery Action 2018 (Cth) Review, the full text of which can be found below.
In early December, Ethical Partners was chosen as a signatory representative at PRI in Person Conference in Barcelona, along with the Central Bank of Finland and M&G Investments from the UK to speak about our Responsible Investment journey.
Nathan speaks in this one minute grab about how to upgrade portfolio quality... but doing so at the right price.
Nathan talks about the importance of being prepared and having done your homework before markets are negatively impacted and why the investment process is like a compass
Ethical Partners Funds Management believes that investors have a crucial role to play in addressing Health and Nutrition in our investment decisions, engagements with companies and our wider advocacy activities.
Ethical Partners Funds Management is proud to once again be a signatory to the Global Investor Statement to Governments on the Climate Crisis that was released this week, along with other concerned investors representing $42 Trillion USD.
For the September Quarter the Ethical Partners Australian Share Fund finished up 3.59% versus the ASX300 up 0.45%, an outperformance of 3.14%. We take a close look at commodity companies throughout the cycle discuss the importance of balance sheets and discuss the importance of looking fro fresh grass while wrapping up our ESG initiatives over the quarter.
Gender diversity and equity is a critical area of focus for Ethical Partners. Through our engagements with our all companies we consider for investment, we actively engage with the board and management teams to ensure that they are adequately measuring and disclosing their gender metrics, as well as setting clearly disclosed targets in these areas.
Ethical Partners, along with RIAA, First Sentier, public health academics and government representatives, was pleased to be part of a recent roundtable held by the Access to Nutrition Initiative (ATNI), to discuss how investors could better leverage their shareholder voice and capital to help address nutrition and health.
During August 2022 the Fund returned 3.30%versus the S&P/ASX 300 Accumulation Index of 1.18% outperforming the market by 2.12%. Over the last six months the Fund has outperformed the market by 6%, over the last 12 months it has underperformed by 0.38% and over the last two years it has outperformed (per annum) by 1.54%.
It has been one year since the Ethical Partners Australian Share Fund set a Net Zero 2050 target. This report illustrates our strong progress over the past year towards these targets.
During July 2022 the portfolio returned 9.85%, outperforming the market by 3.90%. We are pleased that the opportunities identified by our team in recent months are starting to be recognised by the market. The Fund has also paid a final distribution to unitholders during the month. Over FY22, based on the unit price as at 31 July, the Fund has generated a distribution yield of 4%.
Ethical Partners Funds Management is now a founding signatory to the Global Investor Statement on Workplace Mental Health, led by CCLA Investment Management. The initiative asks companies to prioritise mental health management in the workplace.
Ethical Partners Funds Management has been certified for the second year as Carbon Neutral for our own operations by Climate Active.
Ethical Partners Funds Management was honoured to be able to share our story in Chapter 8 of this amazing new book by Claire O’Rourke, released earlier this month.
In our first quarterly, to illustrate how we have managed the portfolio in current markets we have assessed the portfolio in various buckets, benchmarked from December 31st 2021 to end of June 2022. This simple illustration of how we are thinking about our positioning is inspired by the famed money manager and author Peter Lynch (One up on Wall Street, 1989), who coined the categories we have highlighted in our report.
Over the financial year ending June 30, 2022, the Fund returned -8.99% vs the market’s -6.78%, underperforming by 2.22%. Over the last quarter the market has been particularly volatile but we have used the opportunity to buy into and increase our holdings into several high quality companies at levels significantly below recent peaks.
During May 2022 the Fund returned -5.60% versus the S&P/ASX 300 Accumulation Index of -2.76%. Over the past 12 months the Fund has returned 2.89% after fees versus the market's 4.71%.
National Reconciliation week is a time to reflect, learn, share histories and cultures and explore how everyone can contribute to achieving reconciliation in Australia. At Ethical Partners, we are strong supporters of action towards reconciliation, and as such regularly engage with all portfolio companies, as well as many others across the ASX on their current state and path towards reconciliation.
Ethical Partners is proud to be amongst the 60 other companies/NGO's who have this week signed a letter to the European Parliament calling for "living wages" to be included as a human rights in the final EU CSDDD (corporate sustainability due diligence directive).
Ethical Partners was pleased to write to the U.S Securities and Exchange Commission (SEC) last week to communicate our support of the S7-10-22.
During April 2022 the portfolio returned -0.73% versus the S&P/ASX 300 Accumulation Index of -0.84%, outperforming the market marginally. Over the past 12 months the Fund has returned 10.7% after fees, outperforming the market by 0.5%.
During March 2022 the Fund returned 3.83% versus the S&P/ASX 300 Accumulation Index of 6.90%. Over the last 12 months the Fund has returned 15.55%, slightly ahead of the market (after fees).
During February 2022 the Fund returned 1.87% versus the S&P/ASX 300 Accumulation Index of 2.09%, underperforming the market by 0.21%. Over the past 12 months the Fund has returned 14.7%, outperforming its benchmark by 4.45% (after fees).
During January 2022 the Fund returned -8.35% versus the S&P/ASX 300 Accumulation Index of -6.45%, underperforming the market by 1.90%. Over the last 12 months the Fund has returned 12.51%, outperforming the market by 2.92%.
During calendar year 2021 returns generated through individual stock selection saw the Fund deliver 22.07%, outperforming the S&P/ASX 300 Accumulation Index by 4.53% after fees.
Sustainability Analyst, Georgina Murray, recently received a scholarship to study an Oxford University SAID Business School Impact Investing Program. In this article Georgie discusses the course and how we continue to evolve our focus on the impact of our investments.
Ethical Partners was excited to be recently announced as one of the 92 new asset managers to join the Net Zero Asset Manager Initiative.
As investors, our view is that the Bill is not sufficiently robust to ensure adequate protection for sites of significant Aboriginal heritage, or prevent another occurrence like the Juukan Gorge tragedy.
During November 2021 the Fund returned -1.47% versus the S&P/ASX 300 Accumulation Index of -0.53%, underperforming the market by -0.94%. An underweight position in Consumer Discretionary and Energy added to relative performance while and underweight position in companies involved in iron ore extraction detracted from relative performance.
During October 2021 the Fund returned 1.09% versus the S&P/ASX 300 Accumulation Index of 0.10%, outperforming the market by 0.99%. An overweight position in Materials added to relative performance while and overweight position in Financials detracted from relative performance.
This World Children’s Day, 20 November, we recognise the devastating and disproportionate impact the climate crisis is having and will continue to have on children. As the most anticipated event of the year, COP26, finishes, it remains clear we have never needed more urgent action from government, business and society to respond to the climate crisis
During September 2021 the Fund returned -1.19% (after fees) versus the S&P/ASX 300 Accumulation Index of -1.89%, outperforming the market by 0.70%. An underweight position in Healthcare and an overweight position in Transport added to relative performance. Over the last 12 months the Fund has returned 36.03%, outperforming the ASX300 Accum Index by 5.17%.
We are committed to addressing the world’s twin crisis of food security and climate change and the intersection of both of these challenges through our EPORA investment process, our portfolio investment focus on sustainable agriculture and through our engagement and advocacy.
During August 2021 the Fund returned 6.10% versus the S&P/ASX 300 Accumulation Index of 2.61%, outperforming the market by 3.49%. An overweight position in Consumer Staples, particularly Agriculture, and underweight position in Iron Ore stocks contributed to relative performance.
We are Carbon neutral! Ethical Partners Funds Management is pleased to share that we have just received our carbon neutral certification from Climate Active. This means that we have a zero carbon footprint for our own operations
World Humanitarian Day 2021 is a day to highlight the immediate human cost of the climate crisis. This year the United Nations Office for the Coordination of Humanitarian Affairs is increasing pressure on world leaders to take meaningful climate action for the world’s most vulnerable people as we lead up the UN Climate Change Conference (COP26) in November.
During July the Fund returned 1.18% versus the S&P/ASX 300 Accumulation Index of 1.11%, outperforming the market by 0.08%. Over the last 12 months the Fund has returned 30.46% versus the market at 29.14%, outperforming by 1.32%.
Ethical Partners is very pleased to announce that it has formally adopted a Net-Zero by 2050 target for its Ethical Partners Australian Share Fund.
Ethical Partners made a joint submission to the Joint Standing Committee on Trade and Investment Growth's inquiry into the prudential regulation of investment in Australia’s export industries.
The Fund returned 25.22% (post fees) for FY21 versus the S&P/ASX 300 Accumulation Index return of 28.49% over the year to June 2021 capping the market's best financial year return in over 30 years. The Fund remains very actively positioned and achieves returns in a very different way than the market index.
The tragic human rights situation currently unfolding in Myanmar holds particular significance to our Sustainability Analyst Georgina. Please read Georgie’s poignant thoughts on her visit to the camp, our expectations on our portfolio companies in regard to Myanmar, and why Ethical Partners has recently signed on to the Investor Statement on Human Rights and Business Activities in Myanmar.
Our current relationship with plastic is unsustainable and the impact of plastic pollution on humans and the environment is staggering.
As members of the Investor Group on Climate Change, Ethical Partners Funds Management strongly endorses its new roadmap released today in conjunction with the CDP and the Principles for Responsible Investment. It is entitled: "Confusion to clarity: A plan for mandatory TCFD-aligned disclosure in Australia".
During May 2021 the Fund returned 1.56% versus the S&P/ASX 300 Accumulation Index of 2.31%, underperforming the market by -0.75%. An underweight position in IT and an overweight position in Westpac contributed to relative performance while an overweight position in Consumer Staples and an underweight position in CBA detracted from relative performance.
Ethical Partners is proud to be part of over 40 collaborations across the investment industry and with civil society. We believe it is crucial for investors to collaborate, as we see collaboration as both a powerful way to compel companies and policy makers to address issues, but also to advance conversations on these issues amongst the investment community.
We recognise this important day and join the calls for global action to restore the health and vitality of the ocean. Crucially, we acknowledge the vital roles of companies and investors to improve their practices in this area, in order to build resilient marine ecosystems and sustainable fishing practices, as well as to address our global biodiversity crisis.
Ethical Partners believes that as the first stewards of Australia, Aboriginal and Torres Strait Islander people and culture should hold a special and celebrated place in the institutions and fabric of modern Australian society. Ethical Partners has made a submission to the Interim Report to the Australian Government: Indigenous Voice Co-design Process 2021.
During April 2021 the Fund returned 3.63% versus the S&P/ASX 300 Accumulation Index of 3.70%, underperforming the market by 0.07%. Positions in Materials and Financials contributed to relative performance while positions in Telecommunications and Industrials detracted from relative performance.
While the response to climate change risk by regulators, financial institutions and publicly listed companies is welcome, it currently is not enough to ensure a safe climate. This submission provides a comprehensive assessment of the current risks relating to Australia's key export sectors.
It is estimated that 100 pairs of hands touch your clothes before they arrive in your wardrobe. That’s 100 people at risk of modern slavery, poor working conditions, and exploitation. Ethical Partners has recently signed the Investor Statement in Support of the maintenance and expansion of the Bangladesh Accord.
During March 2021 the Fund returned 3.07% versus the S&P/ASX 300 Accumulation Index of 2.30%, outperforming the market by 0.77%. An overweight position in consumer staples and an underweight position in materials contributed to relative performance while an overweight position in financials and an underweight position in consumer discretionary detracted from relative performance. The Fund is +20% over the last six months.
Globally, 15% of the population are persons with disabilities. The labor force participation rate globally for people with disabilities sits at 32.8% compared to 77.1% for those without disabilities. We believe it is imperative that investors use their shareholder voice to raise the awareness of this important diversity issue and help companies to improve their inclusion.
Ethical Partners has recently joined a range of stakeholders in creating 2021 Action Pledges that will contribute towards ending child labour by 2025. Backed by a resolution at the United Nations General Assembly, 2021 was declared as the International year for the Elimination of Child Labour.
Ethical Partners Funds Management welcomes the opportunity to make a submission in response to the report and acknowledges the significant work undertaken by the three co-design committees, led by co-chairs Professor Marcia Langton AM and Professor Tom Calma AO.
During February 2021 the Fund returned -0.08% versus the S&P/ASX 300 Accumulation Index of 1.48%, underperforming the market by -1.55%. An overweight position in Consumer Staples and an underweight position in Healthcare contributed to relative performance while an overweight position in Utilities and an underweight position in Materials detracted from relative performance.
As Responsible and concerned investors, we are happy to stand behind this Global Investor Statement in support of an effective, fair and equitable response to COVID-19. Experts are concerned that at this rate, mass vaccinations in the lowest income countries may not be realised till 2023 or 2024, wreaking havoc on already fragile health and economic systems.
Agriculture is both one of the main causes and core answers to the climate crisis. The global food system face significant challenges that requires collaborative efforts to transform it. The challenge requires the world to feed 50% more people by 2050 while reducing greenhouse gas emissions from existing agricultural practices and improving nutritional levels.
During January 2021 the Fund returned -0.56% versus the S&P/ASX 300 Accumulation Index of 0.33%, underperforming the market by -0.89% (after fees). An overweight position in Consumer Staples and underweight positions in Materials and Healthcare contributed to relative performance while a position in REITS and an underweight position in Banks and Consumer Discretionary detracted from relative performance.
Ethical Partners has made a submission this week to the Australian Parliament on the Customs Amendment (Banning Goods Produced by Uyghur Forced Labour) Bill 2020.
Mirvac’s overall approach to sustainability will see the value of its office portfolio hold up better than the market as a whole over the 2021 - 2022 period. We attribute this expected outperformance to Mirvac’s superior approach to sustainability (including having higher NABERS rated buildings with better amenity and a more conservative approach to valuation) and also due to its newer assets versus the market and longer WALE. These attributes in addition to its residential exposure and recovering retail portfolio see the company very well placed versus peers.
During December 2020 the Fund returned 2.11% versus the S&P/ASX 300 Accumulation Index of 1.32%, outperforming the market by 0.79% (after fees). Overweight positions in Renewable Energy and Transition Commodities and an underweight position in Healthcare contributed to relative performance while an overweight position in Food Products and an underweight position in Information Technology detracted from relative performance.
Ethical Partners has made a submission to to the inquiry on the Climate Change Bill. In our view it is clear that we desperately need whole of government support around the important elements of this bill.
Biodiversity is a very important area of engagement for us at EPFM, and an area of increasing interest for investors. Experts believe that we are in the midst of the Earth’s sixth mass extinction event -some 75 per cent of terrestrial and 66 per cent of marine environments have already been severely altered by human activity and one million species face extinction – many within decades.
During October 2020 the Fund returned 2.85% versus the S&P/ASX 300 Accumulation Index of 1.89%, outperforming the market by 0.96% (after fees). Overweight positions in Insurance stocks and an underweight position in Metals & Mining contributed to relative performance while overweight positions in Consumer Staples and Media & Entertainment detracted from relative performance.
During September 2020 the Fund returned -3.40% versus the S&P/ASX 300 Accumulation Index of -3.60%, outperforming by 0.20% (after fees). Overweight positions in Insurance stocks and an underweight position in Construction stocks and Healthcare detracted from performance while overweight positions in Industrials (specifically Building Products) and underweight positions in Information Technology and Energy contributed to performance
Emma McCarthy recently joined Ethical Partners. Emma is a passionate final year law student and joins us as Sustainability and Advocacy Assistant. We are honoured to share with you her reflections on the recent UN Global Compact conference, and how it inspired her, as a new recruit to the global sustainability and human rights community, on her journey to fight for change.
