Ethical investing has become the latest buzz word for investment managers to sprout to investors when talking about financial strategy for the future.

In fact, in 2020, the Australian responsible investment market reached $1.281 billion, a significant increase from $983 billion invested in 2019 according to figures revealed by the 20th Responsible Investment Benchmark Report developed by the Responsible Investment Association Australasia and KPMG.

The proportion of responsible investment assets under management rose to 40 per cent from 31 per cent in 2020, despite an only two per cent increase in all professionally managed funds in Australia over the same period.

The report highlights the ‘significant gap’ between those that claim to be practicing responsible investing and those that truly embed those practices through formal policies and accountability commitments.

“Let’s define the term ‘ethical’,” Nick Heuzenroeder, managing director, Haven Wealth Partners, says. “If a pack a day smoker cuts down to five cigarettes a day, can they label themselves a ‘non-smoker’ of course not. How is it possible then for managed funds and investment managers to simply reduce exposure to controversial areas, and retain exposure and still label themselves ‘ethical’?

“For Haven Wealth to brand as ethical then it must be a pure as possible, not watered down conventional investment. This is why we had our fund Shariah certified, to show how truly ethical it is. Australia’s Muslim population are experiencing a shortage of competitively priced investment alternatives. We strive to address this issue.”

“Haven Wealth is dedicated to providing a multi asset balanced style investment for individuals and institutions alike to invest in. Charities in particular are interested in talking to us about investing their capital for two reasons: firstly, as the people most likely to donate money are those who have the strongest social agenda and, second; that a charity cannot afford the reputational risk of investing in companies that support the exact thing they are there to address. We are concerned that thousands of charities and non-profits registered in Australia are not fully aware of what their capital is invested in.”

Haven Wealth’s ‘Ethical Absolute Return Fund’ is invested in Australian shares, property and Australian fixed income. This domestic focus helps reduce geopolitical risk and currency risk – two factors being influenced heavily by Russia’s invasion of Ukraine and rising tensions between Israel and Palestine.

“The portfolios we have built are tailored for each client so we include the sectors and markets they desire,” Heuzenroeder says. “In this part of our business, we invest in equity and property markets in US, UK, Japan, Germany, France, Singapore, as well as in Australia.

“We do not expect our initial product to be a ‘one size fits all’,” Heuzenroeder says. “Hence why we custom build investment portfolios to suit the needs of wholesale investors and do so for an ultra-competitive cost. Haven Wealth is currently working with family offices, large institutions and super funds to custom build ethically focused portfolios with a combined $850m tenders currently underway.”