Corporate ethics focus provides new opportunity for social investing, says Ethical Funds exec

Doug Watt

(October 4, 2002) The early part of the 21st century will be remembered historically for a new focus on issues related to corporate ethics and accountability, says Ethical Funds vice-president Margaret Yee. That’s one of the reasons Ethical Funds has chosen this particular time to launch a new family of seven mutual funds, despite a lengthy bear market and a record streak of fund redemptions.

“It’s tough out there, but there are opportunities,” Yee said yesterday at a presentation to financial advisors in Toronto.

“I really think we will look back and say corporate ethics was one of the key issues at the beginning of the 21st century,” Yee told Advisor.ca following the presentation. “It’s just too big not to be.”

Yee cited an Ipsos-Reid survey, which revealed that 35% of Canadian investors believe corporate scandals, such as Enron and WorldCom, have had a negative impact on their investment intentions. “Clearly, the scandals are on people’s minds,” she said.

The socially responsible investment process includes product screens, qualitative screens, shareholder action and corporate dialogue, Yee explained. As part of the dialogue process, Ethical Funds will attempt to orient management toward responsible social, ethical and environmental practices.

The Ipsos-Reid poll, commissioned by Ethical Funds, also suggests that 38% of Canadians are more likely to use the services of a financial advisor who offers a socially responsible investment option. “People with a higher net worth were even more concerned about ethics,” Yee added. “It’s a very attractive segment of the market.” (Find out more about SRI by searching Advisor.ca’s archive.)

Ethical is holding road shows across Canada to promote its new funds to advisors. Also this month, Ethical introduced a load option on its funds as an incentive for the advisor/broker channel. Previously, Ethical Funds were sold exclusively on a no-load basis, mostly through credit unions.

So far, the response to the road shows has been good, Yee said. Yesterday’s Toronto seminar attracted about 30 advisors. “They’re happy that more SRI products are on the market and they’re happy with our marketing material,” Yee said in an interview. “This is really our first foray into the advisor market, so some of the material that you see we’ve never produced before.”

Related News Stories

Ethical Funds reaches out to advisor channel Values added: An advisor’s guide to socially responsible investing Ethical wealth: Clients who wish to incorporate their values into their investment plan may be looking for SRI Fresh air: Why you should determine if your clients are interested in SRI

Traditionally, advisors have been reluctant to add SRI funds to their product lineup. Yee believes that’s because there’s a lot of confusion about what SRI means and advisors don’t want to be embarrassed in front of clients.

“The information wasn’t easily accessible before.” Yee said. “Our objective is to change that, to work with advisors and educate them. If we can help them grow their business, hopefully a percentage will come to us as well.”

Jonathan Allen of Clay Finlay, who manages Ethical’s new European Equity Fund, conceded he was skeptical about SRI, particularly from a performance point of view. “We were reluctant to put our record at risk,” Allen said at yesterday’s presentation.

But after going back 10 years and applying Ethical’s screening process, Allen discovered Clay Finlay’s funds would actually have performed better. “Having an ethical bias should not affect performance,” he said.

As a growth-oriented outfit, Ethical has had a rough couple of years, Yee admitted. “But the bear market doesn’t last forever, it just feels like it,” she said. “If we’re not at the bottom we’ve got to be very near the bottom. And launching now we don’t have that history, we’re starting with a clean slate.”

The Ethical Canadian Dividend Fund, U.S. Special Equity Fund, Global Growth Fund, International Equity Fund, European Equity Fund, plus two RSP-eligible clones, went on the market October 1. Ethical’s SRI fund family of 19 is the largest in Canada. Ethical Funds has $1.9 billion in assets under management and 180,000 investors. The road shows continue next week in Winnipeg, Saskatoon and Vancouver. Click here for more information about or to register for one of Ethical Funds’ future road shows.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca.

(10/04/02)

Doug Watt

(October 4, 2002) The early part of the 21st century will be remembered historically for a new focus on issues related to corporate ethics and accountability, says Ethical Funds vice-president Margaret Yee. That’s one of the reasons Ethical Funds has chosen this particular time to launch a new family of seven mutual funds, despite a lengthy bear market and a record streak of fund redemptions.

“It’s tough out there, but there are opportunities,” Yee said yesterday at a presentation to financial advisors in Toronto.

“I really think we will look back and say corporate ethics was one of the key issues at the beginning of the 21st century,” Yee told Advisor.ca following the presentation. “It’s just too big not to be.”

Yee cited an Ipsos-Reid survey, which revealed that 35% of Canadian investors believe corporate scandals, such as Enron and WorldCom, have had a negative impact on their investment intentions. “Clearly, the scandals are on people’s minds,” she said.

The socially responsible investment process includes product screens, qualitative screens, shareholder action and corporate dialogue, Yee explained. As part of the dialogue process, Ethical Funds will attempt to orient management toward responsible social, ethical and environmental practices.

The Ipsos-Reid poll, commissioned by Ethical Funds, also suggests that 38% of Canadians are more likely to use the services of a financial advisor who offers a socially responsible investment option. “People with a higher net worth were even more concerned about ethics,” Yee added. “It’s a very attractive segment of the market.” (Find out more about SRI by searching Advisor.ca’s archive.)

Ethical is holding road shows across Canada to promote its new funds to advisors. Also this month, Ethical introduced a load option on its funds as an incentive for the advisor/broker channel. Previously, Ethical Funds were sold exclusively on a no-load basis, mostly through credit unions.

So far, the response to the road shows has been good, Yee said. Yesterday’s Toronto seminar attracted about 30 advisors. “They’re happy that more SRI products are on the market and they’re happy with our marketing material,” Yee said in an interview. “This is really our first foray into the advisor market, so some of the material that you see we’ve never produced before.”

Related News Stories

Ethical Funds reaches out to advisor channel Values added: An advisor’s guide to socially responsible investing Ethical wealth: Clients who wish to incorporate their values into their investment plan may be looking for SRI Fresh air: Why you should determine if your clients are interested in SRI

Traditionally, advisors have been reluctant to add SRI funds to their product lineup. Yee believes that’s because there’s a lot of confusion about what SRI means and advisors don’t want to be embarrassed in front of clients.

“The information wasn’t easily accessible before.” Yee said. “Our objective is to change that, to work with advisors and educate them. If we can help them grow their business, hopefully a percentage will come to us as well.”

Jonathan Allen of Clay Finlay, who manages Ethical’s new European Equity Fund, conceded he was skeptical about SRI, particularly from a performance point of view. “We were reluctant to put our record at risk,” Allen said at yesterday’s presentation.

But after going back 10 years and applying Ethical’s screening process, Allen discovered Clay Finlay’s funds would actually have performed better. “Having an ethical bias should not affect performance,” he said.

As a growth-oriented outfit, Ethical has had a rough couple of years, Yee admitted. “But the bear market doesn’t last forever, it just feels like it,” she said. “If we’re not at the bottom we’ve got to be very near the bottom. And launching now we don’t have that history, we’re starting with a clean slate.”

The Ethical Canadian Dividend Fund, U.S. Special Equity Fund, Global Growth Fund, International Equity Fund, European Equity Fund, plus two RSP-eligible clones, went on the market October 1. Ethical’s SRI fund family of 19 is the largest in Canada. Ethical Funds has $1.9 billion in assets under management and 180,000 investors. The road shows continue next week in Winnipeg, Saskatoon and Vancouver. Click here for more information about or to register for one of Ethical Funds’ future road shows.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca.

(10/04/02)

Doug Watt

(October 4, 2002) The early part of the 21st century will be remembered historically for a new focus on issues related to corporate ethics and accountability, says Ethical Funds vice-president Margaret Yee. That’s one of the reasons Ethical Funds has chosen this particular time to launch a new family of seven mutual funds, despite a lengthy bear market and a record streak of fund redemptions.

“It’s tough out there, but there are opportunities,” Yee said yesterday at a presentation to financial advisors in Toronto.

“I really think we will look back and say corporate ethics was one of the key issues at the beginning of the 21st century,” Yee told Advisor.ca following the presentation. “It’s just too big not to be.”

Yee cited an Ipsos-Reid survey, which revealed that 35% of Canadian investors believe corporate scandals, such as Enron and WorldCom, have had a negative impact on their investment intentions. “Clearly, the scandals are on people’s minds,” she said.

The socially responsible investment process includes product screens, qualitative screens, shareholder action and corporate dialogue, Yee explained. As part of the dialogue process, Ethical Funds will attempt to orient management toward responsible social, ethical and environmental practices.

The Ipsos-Reid poll, commissioned by Ethical Funds, also suggests that 38% of Canadians are more likely to use the services of a financial advisor who offers a socially responsible investment option. “People with a higher net worth were even more concerned about ethics,” Yee added. “It’s a very attractive segment of the market.” (Find out more about SRI by searching Advisor.ca’s archive.)

Ethical is holding road shows across Canada to promote its new funds to advisors. Also this month, Ethical introduced a load option on its funds as an incentive for the advisor/broker channel. Previously, Ethical Funds were sold exclusively on a no-load basis, mostly through credit unions.

So far, the response to the road shows has been good, Yee said. Yesterday’s Toronto seminar attracted about 30 advisors. “They’re happy that more SRI products are on the market and they’re happy with our marketing material,” Yee said in an interview. “This is really our first foray into the advisor market, so some of the material that you see we’ve never produced before.”

Related News Stories

Ethical Funds reaches out to advisor channel Values added: An advisor’s guide to socially responsible investing Ethical wealth: Clients who wish to incorporate their values into their investment plan may be looking for SRI Fresh air: Why you should determine if your clients are interested in SRI

Traditionally, advisors have been reluctant to add SRI funds to their product lineup. Yee believes that’s because there’s a lot of confusion about what SRI means and advisors don’t want to be embarrassed in front of clients.

“The information wasn’t easily accessible before.” Yee said. “Our objective is to change that, to work with advisors and educate them. If we can help them grow their business, hopefully a percentage will come to us as well.”

Jonathan Allen of Clay Finlay, who manages Ethical’s new European Equity Fund, conceded he was skeptical about SRI, particularly from a performance point of view. “We were reluctant to put our record at risk,” Allen said at yesterday’s presentation.

But after going back 10 years and applying Ethical’s screening process, Allen discovered Clay Finlay’s funds would actually have performed better. “Having an ethical bias should not affect performance,” he said.

As a growth-oriented outfit, Ethical has had a rough couple of years, Yee admitted. “But the bear market doesn’t last forever, it just feels like it,” she said. “If we’re not at the bottom we’ve got to be very near the bottom. And launching now we don’t have that history, we’re starting with a clean slate.”

The Ethical Canadian Dividend Fund, U.S. Special Equity Fund, Global Growth Fund, International Equity Fund, European Equity Fund, plus two RSP-eligible clones, went on the market October 1. Ethical’s SRI fund family of 19 is the largest in Canada. Ethical Funds has $1.9 billion in assets under management and 180,000 investors. The road shows continue next week in Winnipeg, Saskatoon and Vancouver. Click here for more information about or to register for one of Ethical Funds’ future road shows.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca.

(10/04/02)