18/1/2008
By Michael Walsh
www.ethicalinvestor.com.au
A new global water fund with a strong five-year
track record and two researcher recommendations
was launched in Australia in December.
The KBC Global Water Fund provides exposure to a portfolio of global equities
with a focus on companies that are active in the water cycle. The KBC Group is
a large European banking group which has been ‘actively managing the water
theme’ since 2000 and now has $2.4 billion in its flagship ECO Water Fund.
The portfolio comprises approximately 60 ‘pure’ water stocks (excludes
bottled water companies or others with less than 50% of water-related turnover)
represented along what it describes as five sectors of the water cycle: utilities,
environmental control and metering, engineering consulting, water technologies
and water infrastructure/equipment.
In the five years to September 2007, the ECO Water Fund returned 16.9% per annum
(in A$ terms), which is more than 8% above the Standard & Poors Water Index.
It also beat the broader global shares benchmark over that time.
The security selection process also incorporates an SRI overlay that evaluates
environmental impacts and corporate governance standards and excludes companies
with: nuclear energy exposure, human rights violations and military involvement.
The largest holding of the underlying fund is French giant Veolia Environnment.
The fund was launched with a Recommended (second highest) rating from managed
funds research providers Aegis and Lonsec.
It is structured as an open-ended retail unit trust with a minimum investment
of $10,000 and an annual management fee of 1.95%.
