NETHERLANDS - The €1bn pension fund for pastors and preachers of the Dutch protestant church has, together with SNS Asset Management, launched a European responsible equity index fund.

The preachers' scheme, which has focused on social and responsible investing (SRI) since its launch in 2005, invests mainly via institutional funds but felt it had not enough say on the investments within these funds, IPE learnt today.

Peter Eenshuistra, director of the pension fund, told IPE his fund did not want to change its investment approach and therefore decided to launch its own index fund, together with SNS Asset Management.

Harry Hummels, director of SNS Asset Management and a professor in ethics who has drafted guidelines for responsible investing for pension funds, has been closely involved in the launch of the new index fund.

The SNS Responsible Index Fund Equity Europe aims to achieve returns in line with the market, but at the same time does not want to invest in businesses producing land mines, cluster munitions, or atomic, biological or chemical weapons.

Other categories which are exempt are businesses found to be involved in gross violations of human rights, gross forms of child labour, forced labour, gross forms of corruption, and major environmental pollution.

The benchmark for the fund is the Morgan Stanley Capital International Europe Standard Index.

Based on fundamental social, ethical and environmental company analyses, companies who do not satisfy the criteria will not be included in the index.

However, Risk Metrics Group has been tapped to engage with companies whose activities or practices may be in violation of the fund's principles, said Eenshuistra.

SNS Asset Management said today it expects that only a small number of companies will be excluded, which will keep the tracking error of the fund limited.

The fund - which is structured as a form of mutual fund known as an FGR or semi-open fund for joint account - is designed to hold around €250m in assets. To date, €100m of this amount has already been committed, Eenshuistra told IPE.

According to SNS, successful introduction of the European fund will be followed at the end of 2008 by the launch of a responsible index fund looking at the United States market.

SNS Asset Management has today also announced it has launched its second microcredit investment funds "exclusively intended for institutional investors".

The first micro credit fund, which was launched in January last year, now has investments of more than €160m.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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