Would you like ethics with that?

Close watchers of Macrobusiness will be aware that after a year of set-up we recently launched a fund to implement the macroeconomic themes for readers in the market.

When putting together an offer like this to such a broad readership, there are always going to be surprises.

One area that offered such a surprise is the popularity of the ethical screening component of the fund where investors remove themes that don’t sit well with their ethics.

One, because it was never actually advertised as a feature of the fund, meaning that it was really a ‘value add’ as opposed to an attraction to invest.

Two, it’s remarkable that this type of ethical stock screening is not (in my understanding) widely available to the public investor, without going down a specific ethical advice path (with commensurate cost). This would typically lead you to believe that there is not a lot of demand for this type of service in the market, or perhaps that its ‘all too hard’ for a product provider to implement.

Well, from our initial response it is safe to say that ethical screening is front of mind – with over two-thirds of new accounts created choosing at least one ethical screen!

The next surprise was the most commonly chosen ethical screens. We have taken the approach at Nucleus that ‘your ethics are unlikely to be our ethics’ and this has come shining through. For example, relatively few investors screen out Nuclear (i.e. companies that produce uranium or run nuclear power plants) but the most chosen screen was for companies that produce cluster munitions:

ethical choices

 

See below for a list of the choices given – the website has more details on each of the categories and the ‘Review’ page shows the impacts of ethical choices on our portfolios.

 

Ethical Choices at MB Fund

For example here is a sample from the current portfolio:

extract of ethical choices

Tim Fuller is Head of Operations at the MacroBusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Tim Fuller is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Integrity Private Wealth Pty Ltd, AFSL 436298.

Tim Fuller

Head of Operations at Nucleus Wealth
Financial adviser seeking to make quality investment solutions more accessible to everyday Australians.
Tim Fuller

Comments

  1. Can we have a * No gain from greater net Australian migration ” ethical sector.

    I am being serious here. See, having expounded an argument so vehemently [ whether it is forceful, though, is another matter altogether ] for it, it appears logical that we should * put our money where our mouth is *, isn’t it.

    So, lets really see if we stand up for our principles.

    Where we going to make money from, in the case of this particular exclusion, though?

    It may then be a case of hypocrisy – similar to advocating that the housing market is expensive [ the last ten years’ argument ] , but not selling one’s house.

    Your reply appreciated. Regards – XXXX

      • I have told him aged care and disability are crying out for native English speaking older men. He just needs to get a cert 3 or something. God knows he has time. Thoroughly government-regulated work paying award wages. Don’t see how he could fail unless he was useless. In fact he could probably just ring local nursing homes and explain his plight and ask if they could sponsor his cert 3 and then give him a job. They can fund all sorts of traineeships for Australians easily, especially if he’s on income support.

    • Filter out companies with Australian customers then?

      I thought that’s pretty much the focus of the fund – giving people international or export or non-AUD oriented exposure. It’s the default setting.

      • Stop talking sense Peach, Nuisance is only here to troll. His posts are a known carcinogen; direct exposure has been linked to a heightened risk of brain cancer.

    • Can’t we at least have a balance between business making money and our cities being fucked up?

    • This is not really a sensible or considered comment though is it?
      Firearms, tobacco, nuclear power etc. undertaken by private enterprise generally involve international corporations. A choice not to invest in such an enterprise is one way of choosing not to support something that one would ordinarily have no say in.
      Immigration to Australia is a domestic political issue. As you know, it can’t really be teased out in the way a manufacturer of land mines could be. Any local investor who is also a citizen is free to vote for parliamentary representatives and so potentially influence domestic immigration policy.

  2. Different generations have different ideas about what is ethical. The one you want to know now is the millennials… they are finally sucking the millennials into the stock markets……… the only questions about this re-run is….is it 1998 or 1999 redux

    http://www.zerohedge.com/news/2017-07-31/schwab-new-accounts-are-levels-we-have-not-seen-dot-com-bubble-millennials-rush-stoc

    Remember a 60% loss ( the minimum to be expected from these levels ) takes a 150% gain to rebalance ( over how many years ? )

    • Because its creation can often involve fairly unsavoury practices (desperate poor people, bullying, drug addiction, etc) ?

      • i could say the same thing about every industry in existence

        They are all based on the exploitation of workers
        (and in some cases, the environment as well)

    • Yeah I’d like to know

      Is this the ISIS share fund?

      I presume you won’t be positioned to profit from the sex robot revolution either

  3. Is there a fund that aligns with “No Tax Evasion”, or a fund that checks whether the subscribers to the fund also follow the same ethics? For example: “No Arms” fund subscribers must and should refrain from contributing to their Govts. Defence contracts?

    If subscribers to funds are not checked/vetted for their ethics then these “ethical funds” are as farcical as Tony Abbott!

  4. Is there an antiethical choice?

    What if I figure the world is fucked, I might as well make a buck off the blood and tears of my brethren?

    Long: war, death, mutilation, environmental destruction, shitty health and oppression!

  5. Mmmm …. still missing a few ethics gorillas from that list:

    Banks
    FIRE sector, in general.

  6. kiwikarynMEMBER

    No jails? Jails are a public service. There should be more jails. And more people in them. Would you really prefer the likes of Adrian Bailey to be free to wander the streets? (how well did that work out for Jill, and the other five women he raped after he was released?)

    • Damien KlassenMEMBER

      Some people believe jails should be run by governments not private corporations. They believe that it is not ethical to let companies with a profit motive (and so potentially little interest in re-habilitation) to run jails.

      This is exactly why we let people choose their own ethics rather than imposing any upon them.

      We let each investor choose what is right for their views.

  7. I initially looked at no fossil fuels high impact, but that excluded Rio Tinto and BHP. BHP don’t have any/much thermal coal, lots of petroleum. Could you detail further why they had that class?