Beyond Capitalism

Over on the Grey Nomad we have been introduced to EFTs and Index Funds. Basically an avenue to get broad exposure to the market, pinning your success to that of the overall market performance. The Grey Nomad even found a mildly ethical ETF being UBS IQ MSCI Australia Ethical ETF (Unfortunately, we could not get stock quote ASX:UBA this time.) which tracks the market but avoids big tobacco and weapon manufacturers.

But as highlighted in that article they still invest in Australia’s mining giants. Why is it so hard to be a good investor? To be honest, it is near impossible to find a truly ethical business. But what I want to introduce to today is a ASX listed fund which was founded with doing good in mind. They operate as a Listed Investment Company, the first internationally focused on to list on the ASX.

Future Generation Global Company (Unfortunately, we could not get stock quote ASX:FGG this time.) is the company in question. At the core of what they do is leverage pro bono relationships with some of the world’s biggest and most repeatable hedge funds. Through the use of an investment committee (also donating their time and expertise) this fund gives global exposure though a single ASX listing.

The first great thing about these guys is access to a range of managed funds without super high management fees. It is not uncommon for hedge funds to charge 2% of total assets as the management fee. ASX:FGG on the other hand charges no such fee, nor do the funds they work with. Instead, all parties involved donate the time so that a donation can be made to charities.

Future Generation Global has committed to donating 1% of net assets to charities each year, based on current market capitalisation that’s about $3M. The focus of these donations is to support young people with mental illness. Organisations including Headspace, Beyond Blue and the Black Dog Institute stand to benefit from these funds. So readers, this is a genuine cause that is easy to get behind, benefits society and in turn, should benefit your stock portfolio.

FGG listed last month on World Suicide Prevention Day, significant of course due to the underlying cause that the group aim to address. The issue price was $1.10 with a capital raising of $302 million, one of the largest IPOs in Australia this year. This speaks to the experience carried by the board, led by University of Sydney Chancellor Belinda Hutchinson, one of the few female chairmen to have led an IPO onto the ASX. On the opening day FGG closed at $1.05, 4.5% down from the issue price.

At the start of October it managed to reach the highs of the issue price but has since settled just below. The long term outlook here hard to predict given the nature of the investment. But having the chance to invest money now, at this point of the global market suggest there are strong gains to be made as the market recovers. This risk profile is in part mitigated due to the global exposure the group carry.

With the board in place, the experienced investment committee steering the wheel this is a great chance to invest in a global investment fund. This is a stock I would be interested in regardless of the philanthropic efforts which make it an all-round good buy in my books. This is a chance to join great company and make a difference at the same time.