The U Ethical Australian Equities Trust aims to provide moderate tax effective income and long term capital growth by investing in listed Australian equities according to socially responsible and ethical principles. It gains its exposure to cash and fixed interest securities by investing in the U Ethical Enhanced Cash Portfolio.
We ensure that all investment decisions are in keeping with our vision and that they promote careful financial stewardship. This is achieved through the application of positive and negative screens, and engagement with companies, together with a focus on competitive economic returns and sustainability.
The Ethical Investment Policy contains a negative screen which restricts investment in securities with a material exposure to the following excluded activities: armaments, uranium, gambling, animal cruelty, alcohol production, tobacco manufacturing, pornography, thermal coal mining and export, and non-conventional oil and gas extraction. We do apply a 5% threshold, where we will consider investing in a company if the excluded activity amounts to less than 5% of revenue and we feel the positive aspects of the company outweigh the negative.
U Ethical Funds Management will also not invest in companies whose products, services and practices cause or perpetuate injustice and suffering, infringe human rights, cause unacceptable damage to the natural environment, have unacceptable environmental management practices, support oppressive regimes, or have unacceptable occupational health and safety practices.
The Positive Screen applied ensures that at least 10% of the fund is directed towards activities which have a positive effect on either society or the environment. This includes: clean energy, sustainable agriculture, recycling, employment, health care, education and community services.
The U Ethical Enhanced Cash Portfolio in which the Trust is invested, aims to invest directly in a balanced mix of cash and cashable securities, fixed interest securities (including hybrid securities, debentures, corporate bonds and mortgage backed securities), commercial mortgages and community impact loans.