UK- Mellon Global Investments (MGI) is launching an ethical index fund, Mellon European Ethical Index Tracker, that will mimic Europe’s first ethical index created in 2000 by the independent financial advisors E.Capital Partners.
The tracker, which is a sub fund of MGI’s Dublin-domiciled UCITS umbrella, aims to match the performance of E.Capital’s index and to provide long term capital growth. It has multiple share classes and, although only available in the UK at present, is to be offered to European investors in the near future.
For the ethical index E.Capital uses a screening approach developed by Osservatorio FINETICA, a joint venture between the Vatican University and Universita Bocconi, the Italian business school.
The index includes 150 European stocks representing approximately 66% of Europe's market capitalisation. Each stock has to fulfil negative screening for business activities associated with tobacco, alcohol, gambling, pornography, military and nuclear-related activities and stock selection is ratified by an independent committee comprising senior representatives of the Silesian, Cappucin and Jesuit orders.
Jon Little, senior vice president of Mellon Global Investments says: “we have seen considerable interest among Catholic institutions for this new fund. It offers a unique opportunity to invest without compromising ethics and beliefs, nor potential investment returns.”
The tracker fund will be managed by the group’s ethical investment arm Mellon Equity Associates. Mellon manages $4bn in ethical funds.