Ethical Diversified Fund
Income, growth and diversification
One of the advantages of the Uniting Financial Services Ethical Diversified Fund (“Ethical Diversified Fund”) is that you receive both an income stream, as well as capital growth over time. These are delivered within a robust ethical framework, with the aim of maximising returns and managing risk. The Ethical Diversified Fund is a more diversified investment option than alternatives such as buying an investment property. While still delivering an income stream, it also provides access to specialised investment classes typically not available to smaller investors. This approach aims to provide a total return over the medium to long term by the cash rate plus 2-3% pa, over a rolling 5 year period.
Distributions paid quarterly or reinvested at your choice
- Minimum investment of $500,000, or such lesser amount as agreed with the Trustee
- Recommended timeframe is 3 to 5 years
- Distributions are calculated quarterly
- No entry or exit fees
- Statements issued quarterly
Direct your investment
Distributions can be reinvested as additional units in the Fund or directed to a bank account of your choice, which is handy for maintaining a regular cash flow. Further, additional monies can be added to the investment, and provided monies are received by the last business day of the month, the unit price for that month will be given.
Access your money early
While the Ethical Diversified Fund is designed as a medium to longer term investment (three to five years), you are able to access your funds if your circumstances change. If you do need to access your money, three months’ notice of withdrawal is required.
The Information Document for the Ethical Diversified Fund dated 13th January 2017 is issued by The Uniting Church (NSW) Trust Association Limited ACN 000 022 480 (“Trustee”, “UCTAL”) trading as Uniting Financial Services (“UFS”). The Information Document for the Ethical Diversified Fund has not been, and is not required to be, issued in the form of a product disclosure statement or lodged with the Australian Securities and Investments Commission (“ASIC”) under the Corporations Act (“Act”). The Ethical Diversified Fund has not been, and is not required to be, registered as a managed investment scheme under the Act. Neither the Fund, any interest in the Fund, the Trustee, this document or any offer contained in this document or in relation to the Fund has been approved or examined by ASIC. Investments are designed for investors who wish to promote religious and charitable purposes and for whom profit considerations are not of primary importance in their decision to invest. Investors may be unable to get some or all of their money back when the investor expects or at all and the investment is not comparable to investments with banks, finance companies or fund managers. The Ethical Diversified Fund is available only to wholesale/sophisticated investors.
The Ethical Diversified Fund is designed for investors looking for a higher return investment option than short term interest rates offer. The Ethical Diversified Fund seeks to optimise and a steady income returns over the long term (3 to 5 years) by investing in a range of asset classes and securities: (i) that are assessed to have above average prospects of performing well over relevant time periods, and (ii) that comply with the Ethical and ESG Policy (“Ethical Policy”) of the Uniting Church of Australia Synod of NSW & ACT. The Ethical Diversified Fund aims to deliver total return (income and capital growth) after costs and before tax of 2%-3% above the RBA’s official cash rate on a rolling 5 year basis. The Fund has selected multiple investment managers whose styles are aligned with this objective. These managers may include UFS as an in-house manager.
Benefits of investing in the Ethical Diversified Fund
The Fund provides investors with access to a diversified portfolio which is actively and ethically managed. It offers the potential of relatively stable, risk adjusted returns above cash. It achieves this through the use of active management of both the asset allocation and of individual asset classes, within a robust risk management framework.
Ethical management is undertaken in accordance with the Ethical and ESG Investment Policy of the Uniting Church in Australia Synod of NSW & ACT. The policy is to avoid making investments which encourage or profit from activities which create goods or services that have unacceptable harmful effects on people or the environment which cannot be avoided by prudent, practical controls. This involves both screening out certain activities that are excluded under the Ethical and ESG Investment Policy and intentionally seeking investments that have positive environmental or social impacts, while delivering returns consistent with the overall objectives of the Fund.
Risk management strategies assist the Fund by seeking to minimise investment losses in potentially adverse investment environments. Risk is managed primarily through diversification, hedging and active asset allocation and security selection. Risk management does not guarantee that losses will not occur.
Diversification is achieved through:
- constructing a portfolio made up of several different asset classes such as shares, credit, cash, fixed income, property, infrastructure and alternative assets, in both Australian and international markets; and
- management within each asset class with appropriate diversification across sectors and the number of individual exposures, limits on individual risks and cross-correlations of expected performance outcomes.
Active asset allocation involves intentionally reweighting the Fund’s portfolio across the range of asset classes in order to take advantage of opportunities arising from market movements and mispricing, with the aim of maintaining a portfolio relevant to the current investment environment.
Minimum suggested investment timeframe
The minimum suggested investment timeframe for the Ethical Diversified Fund is 3 to 5 years. What this means is that over shorter periods the return of the Fund will often be below the objective, but that there is a reasonable expectation that over 3 to 5 years, it will be attained. That outcome is not guaranteed, however. The minimum suggested timeframe is a general guide only and the Trustee does not guarantee that the performance objective will be achieved over any 3 to 5 year period.
Uniting Financial Services is the overall manager of the Ethical Diversified Fund, as well as the in-house manager for Australian Commercial Mortgages, Australian Fixed Income and Cash. The Australian Commercial Mortgages portfolio is an apportionment of UFS’s larger commercial mortgages portfolio. The allocation of this portfolio to the Fund is based on the asset allocation ranges as specified in the Information Document and is reviewed by the Fund’s auditor.
For more than 80 years we’ve been providing income to The Uniting Church in Australia’s Synod of NSW and the ACT, directly contributing to the Uniting Church’s mission and service to communities in need, as well as supporting church life and congregations. Our professional and prudent approach to investing has helped us build our funds under management from just over $400 million fifteen years ago, to more than $1.25 billion today.
When it comes to individual wealth creation and caring for communities, we’re not for one or the other: we’re for both. Some call what we do ethical or socially responsible investing. We call it Ideal Investing. For us, effective financial management benefits both the individual and their community, and serving one need never compromise the interests of the other.
Ideal Investing is at the heart of everything we do and is reflected in our mission, beliefs, goals and vision.
Ausbil Investment Management Limited is a leading Australian investment manager. Established in April 1997, Ausbil’s core business is the management of Australian equities for major superannuation funds, institutional investors, master trust and retail clients. Ausbil is owned by its employees and New York Life Investment Management (NYLIM), a wholly-owned subsidiary of New York Life Insurance Company. NYLIM has more than US$500 billion in assets under management. NYLIM has a number of boutique affiliates including MacKay Shields, Candriam Investors Group, IndexIQ and Cornerstone Capital Management.
Ausbil’s company structure embraces four criteria important in the selection of an investment manager:
-Solid ownership structure providing strong financial integrity to the investment manager;
-Key management incentivised by way of ownership in the business;
-Proven investment processes and performance track record in core areas of expertise with a strong focus on risk management skills;
-An experienced and stable team of investment managers.
The investment philosophy and corporate goals of Ausbil have been formulated to provide a tightly defined and disciplined investment management style that is active and incorporates quantitative inputs and risk awareness. Ausbil’s style pursues the goal of adding value from a clear set of transparent processes that seek to enhance performance, whilst managing risk.Ausbil is a signatory to the United Nations Principles for Responsible Investment (UN PRI) and has a dedicated environmental, social and governance (ESG) research team who provide an in-house service. ESG research is incorporated in Ausbil’s investment process. Ausbil believes that a consideration of ESG issues as developed by well-founded ESG research can identify mispriced stocks and assess a company’s earnings sustainability. Similarly, engagement on ESG issues can drive long-term value and reduce the risk of value destruction.
Ausbil has monitored and engaged with companies on their corporate governance record and to this extent has historically regarded proxy voting as an important part of its fiduciary duties.
Ausbil is a manager within the Australian shares portion of the UFS Ethical Diversified Fund.
BT Investment Management Limited’s (BTIM) reputation has been built on the expertise and innovation of its investment team, led by experienced investment managers focused on delivering investment performance for clients. BT Investment Management Limited was formed in 2007 from the investment management businesses of Rothschild Australia Asset Management, Westpac Investment Management and the wholesale funds management business of the BT Financial Group – and has a long history of investment management in Australia.
BT Investment Management manages a portion of the Australian Equities allocation of the Ethical Diversified Fund, together with Ausbil Investment Management.
BT is a manager within the Australian shares portion of the UFS Ethical Diversified Fund.
BT Financial Group (BTFG) and BT Investment Management (BTIM) have worked together to produce a unique solution to deliver sustainable investment solutions specific to individual client preferences and needs.
As Westpac’s wealth expert and one of Australia’s leading investment managers, BTFG has been helping Australians invest since 1969 and has more than $130bn in funds under administration. The Westpac Group was ranked the most sustainable bank globally in the 2016 Dow Jones Sustainability Indices (DJSI) Review.
For over 40 years BTFG has been offering asset and portfolio management services to our diverse clients, including individuals, private companies, charities and self-managed superannuation funds, demonstrating our commitment to developing and maintaining relationships with our clients.
Our dedication to understanding the needs of our clients and the importance of sustainability as part of the investment process has led to BTFG becoming one of the largest fund managers in the Australian market.
AMP Capital is a leading investment house with A$160 billion in funds under management. AMP Capital has a heritage and strength in real estate and infrastructure, and specialist expertise in fixed income, equities and multi-asset solutions. Their experience and leadership across asset classes not only provides insights into ever-changing markets, but also means they are at the forefront of developing contemporary investment solutions for clients.
AMP Capital manages the International Equities portion of the Ethical Diversified Fund.
EG Funds Management is focused on creating alignment in their relationships with capital partners believing that this is fundamental to long term success.
EG Funds Management’s systematic, data-driven approach is underpinned by a unique risk management system, PRISMS®. This web enabled software ensures a methodical approach to identifying, evaluating and pricing market and asset risk. This proprietary technology has allowed EG to be a leader in the industry.
EG Funds Management runs the High Income Sustainable Office Trust (HISOT) for UFS.
Altius Asset Management was co-founded by Bill Bovingdon and Chris Dickman in 2011 and is now wholly owned by Australian Unity. Altius has an average of almost 30 years financial markets experience across global and domestic investment managers and banks, insurance companies and treasury corporations.
Altius’ investment philosophy is founded on these core beliefs:
- The key to capturing market inefficiencies is through a top down analysis of the domestic and global economies and financial markets.
- It is important to know what is happening across the world in addition to the Australian market in order to understand the pressures on interest rates and yield curves, and the interest rate differentials between bond issuers within and across different sectors of the bond market.
- Once these pressures are understood, relative value analysis can be used to exploit outright rate movements as well as changes in the shape of the yield curve and movements in the relativities of yields available across and within different sectors of the bond market after adjusting for credit risk
- Through our specialist skills, we can extract value for clients through macro research, sector rotation, interest rate and credit management and technical investing.
Altius is a specialist Australian fixed income manager, who manages the Altius Sustainable Bond Fund. The Altius Sustainable Bond Fund is a domestic fixed income fund that is actively managed, with ethical and sustainable, investment principles fully integrated into the security selection within the portfolio. The Altius Sustainable Bond Fund won the Lonsec Innovation Award 2016.
1. Lonsec does not issue, sell, guarantee or underwrite this financial product. Go to www.lonsec.com.au for details of its ratings criteria.
Omega’s motto is to begin with the end in mind and we believe investors aims are best fulfilled by having portfolios that are intelligently designed with a specific outcome or performance objective in mind.
Omega’s investment professionals have significant experience in delivering innovative investment solutions for institutional and retail investors around the world, covering global markets across bonds, equities, derivatives and currencies.
Omega believes a robust approach to risk management coupled with an outcomes focused approach to portfolio construction is essential to fulfill its aim of delivering on the investment objectives for investors.
Omega manages the Global Fixed Income portion of the UFS Ethical Diversified Fund.