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December 03, 2003
Two New Real Assets Funds Attract $25 Million in Their First Two Months
by William Baue
The Real Assets Social Leaders Fund and Social Impact Balanced Fund are off to a flying start,
re-invigorating social investing in Canada.
The number of options for Canadian social investors to diversify their portfolios with mutual funds
just grew. Vancouver-based Real Assets
Investment Management recently launched two new Canadian socially responsible investment (SRI)
retail funds, which have grown too. Investors are showing strong support for the funds, as the Social Leaders Fund and
the Social Impact Balanced
Fund stand at $25 million in assets after their first eight weeks of operation.
The Social Leaders Fund is a global equity portfolio of 25 to 100 of the “very
best corporate citizens.”
“The Real Assets Social Leaders Fund is Canada's
first example of true positive screening,” said Deb Abbey, Real Assets’ CEO and
portfolio manager. “Other funds claim to do positive screening, often calling it a
‘best-of-sector’ approach, which means they screen out the worst companies on social,
environmental and ethical performance measures in certain industries.”
‘best-of-sector’ is really a misnomer--this approach should be called
‘worst-of-sector avoidance,’ as it's actually a kind of negative screening,” Ms.
Abbey explained to SocialFunds.com. “The Social Leaders Fund is the only Canadian fund that
selects companies on the basis of outstanding leadership in social and/or environmental
performance--and their ability to demonstrate the financial benefits of that leadership.”
Real Assets selects the “social leaders” that constitute the fund according to
six criteria, including environmental sustainability, transparency and accountability, community
relations in interaction with all stakeholders, and financial metrics. The fund’s top three
holdings include Novo Nordisk (ticker: NVO), Nokia (NOKBF), and Church & Dwight (CHD).
Social Leaders Fund should not be confused with the same-named fund Real Assets launched in
February 2002 aimed at “sophisticated investors,” a Canadian designation for high
“It has the same name but is a different fund with different
investment parameters and different holdings, although obviously some are the same,” said Ms.
Abbey. “We closed the original pooled fund when the regulatory environment in Canada
changed, making pooled funds difficult to sell to individuals.”
The Social Impact
Balanced Fund is an index-based product composed of Canadian and US stocks as well as Canadian
fixed income. The Canadian equity component should match the S&P TSX Composite; the US equity
component should match the S&P 500; and the Canadian fixed income returns should match the Scotia
McLeod Bond Universe. The fund screens out the worst social and environmental performers in its
universe, but it focuses its efforts on improving corporate practice through shareowner action.
Real Assets is introducing two new shareowner action campaigns in the 2004 proxy season.
One focuses on the glass ceiling, or obstacles to women’s corporate advancement, and the
other on the HIV/AIDS pandemic. Real Assets will also expand its climate change campaign while
continuing with current campaigns including those addressing water scarcity, human rights, and
These campaigns are generating real change. Last year, for example,
Real Assets co-filed shareowner resolutions that asked the five major Canadian banks to assess
environmental and social risk. The filers withdrew the resolution at Canadian Imperial Bank of
in exchange for board-level dialogue.
Today, the bank announced its adoption of the Equator Principles. These principles
are a voluntary set of environmental and social screening guidelines for evaluating on a global
basis development projects with capital costs exceeding $50 million in all industry sectors.
“This is a major breakthrough in our responsible finance campaign,” said Ms. Abbey.
“The bank also agreed to begin incorporating Global Reporting Initiative (GRI) social performance indicators in its Public
Accountability Statement and its annual report, and expects to incorporate environmental
performance indicators once GRI’s Financial Sector Supplement is complete.”
Bank of Nova Scotia (BNS) has also made substantive
steps forward, according to Ms. Abbey. However, Real Assets has re-filed the resolution with Bank
of Montreal (BMO), and is prepared to re-file
with Toronto-Dominion Bank (TD) if shareowner dialogue does not
result in action.
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