Socially responsible investing debuts in India with ABN Amro

Socially responsible investing debuts in India with ABN Amro
Mumbai, Mar 5 (PTI) ABN Amro Mutual Fund has floated a new fund that will invest in only those companies which are socially responsible.

The ABN Amro 'Sustainable Development Fund' would invest in companies that are socially responsible and financially viable at the same time, Nikhil Johri, Managing Director of ABN Amro Asset Managment Company, told reporters here.
According to a study by ABN Amro, the returns offered by socially responsible companies over the last five years have outperformed all broad market indices.
The new fund will remain open till March 30.
ABN Amro MF, with assets under management of over Rs 5,000 crore, would identify such companies based on certain parameters evaluated by credit rating agency Crisil.
The screening and scoring process done by Crisil has already resulted in elimination of as many as 253 of the top 500 companies.
Explaining the concept, David Morrow, Global Product Specialist for socially responsible investing, said it started with a section of religious investors in the US in the 1920s and 30s who would not invest in shares of alcohol companies.
In subsequent years, there were investors who would not invest in companies which kept contact with the apartheid regime in South Africa. During the Vietnam war, a section of investors stopped investing in companies making arms. In the 1970s, environmental issues started influencing investment pattern.
Over the years, the concept has caught on and currently, about 10 per cent of total AUMs in the USA are held by mutual funds practising socially responsible investing.