SSGA fund divests tobacco and weapons

A State Street Global Advisors Australian-based fund with about $900 million under management is divesting from weapons and tobacco companies.

The State Street Global Index Plus Trust, which invests in global companies and aims to outperform the MSCI World ex-Australia Index over the long-term, has stripped 12 companies in its investment universe effective July 31.

It now invests in 620 companies, 60% of which are US-listed and include Apple, Microsoft and Nestle.

Companies specifically involved in manufacturing tobacco, cluster bombs, landmines, chemical and biological weapons, and depleted uranium weapons have been excluded.

Established in December 2000, the fund is designed for investors seeking incremental returns above the benchmark at a lower cost than most active funds. It has outperformed the benchmark in 13 of the past 16 calendar years at a management fee of 0.3%.

SSGA head of portfolio strategists for Asia Pacific, Jonathan Shead said that removing these companies from the fund won't affect its level of diversification at the country or sector level and investors will continue to get the broad market exposure they are seeking.

"We are keen to make ethical investing more accessible to all institutional investors, not just the very large ones able to utilise a separate mandate," he said.

The firm's State Street International Equities Index Trust Ex Tobacco Ex Controversial Weapons, which launched last year, also has a similar responsible investment strategy. Funds under management have risen to $229 million.

SSGA manages about US$182 billion ($227 billion) in ESG assets out of a total US$2.6 trillion ($3.3 trillion) AUM.

Read more: SSGAState Street Global AdvisorsJonathan SheadMSCI World ex-Australia IndexNestleState Street Global Index Plus TrustState Street International Equities Index Trust
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