Evergreen launches Australia’s first tax-effective diversified ESG investment bond


Angela Ashton

Leading independent investment consulting firm, Evergreen Consultants has launched a new, industry first model portfolio, the Evergreen Responsible Growth Model, designed to give advisers and investors an opportunity to invest in a tax-effective, long-term Responsible Investment (RI) portfolio.

The Evergreen Responsible Growth Model is a tax-effective investment bond, offered through investment bond specialist Generation Life. It is a diversified, multi-manager portfolio targeting sustainable returns of the cash rate plus 3.5% a year, after fees and tax.

Investment bonds are classified as tax-paid investments, which means that when earnings on the investments are received they are taxed at 30% (the corporate tax rate) and the tax is paid by the fund. Tax credits, such as imputation credits, may lower the effective tax rate.

This Model is part of the newly launched responsible investment options by Generation Life.

Evergreen Consultants Founder and CEO, Angela Ashton, says the Model will appeal to the 80% of Australian investors who believe environmental issues are important when it comes to investing their money.

Evergreen is using its propriety index, the Evergreen Responsible Investment Grade (ERIG) Index, to identify funds that are genuinely investing with Environmental, Social and Governance.

Ashton says: “Given the lack of a consistent framework for responsible investing and limited access to accurate data, Evergreen took on the task of developing its own index and has used it as the basis for the Model.”

Evergreen is a member of the Responsible Investment Association Australasia (RIAA) and has adopted RIAA’s Ethical Investment Spectrum, a framework that sets out the various approaches to RI in seven categories. The ERIG Index utilises a questionnaire-based, top-down assessment that evaluates the depth and breadth of a manager’s process and actions.

The ERIG Index focuses on which of these capabilities a manager offers and their strengths and weaknesses in each, assigning a grade to each category.

Using this data, Evergreen’s experienced and highly skilled investment team has constructed a diversified multi-manager portfolio, with a 75% allocation to growth assets.

The current Model has 21 funds from 18 underlying managers, including Australian Ethical, BetaShares, ClearBridge Investments, DNR Capital, Janus Henderson, Pendal, Pengana and State Street. The portfolio is reviewed monthly to ensure all positions remain best in class.

Ashton notes: “As investors across the board become increasingly conscious of the impact companies are having on the environment and society and take an active role in ESG considerations, we will continue to offer innovative solutions for long-term investors who care about their capital being invested wisely, as well as doing good for themselves and future generations.”

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