NEW YORK: Following a review of 10,228 U.S.-based mutual funds, Morgan Stanley has concluded that investing in sustainability has "often" exceeded the performance of comparable traditional investments.
The company says it was prompted to conduct the review by what it says is an obvious growth in sustainable investing. In 2012, one dollar out of every nine in U.S. assets was invested sustainably, primarily in public equities. By 2014 that number had risen to one dollar out of every six to reach a figure of US$6.57 trillion.
Morgan Stanley defines sustainability as a commitment to economic well-being for both the present and the future, balancing society's needs today with the demands of tomorrow: "Sustainability encompasses behaviors, processes, tools and technologies that can be perpetuated and replicated in ways that achieve economic, social or environmental benefits. We see sustainable investing as the practice of mobilizing capital to businesses that engage in these behaviors and practices."
The sustainability investment review coincides with the successful flotation of a US$913 million Islamic 'Sukuk', or risk-sharing bond, by Emirates Airline to finance the lease of four A380 aircraft for delivery between April and July 2015.
The offer, backed by the UK government's Export Credits Guarantee Department, was oversubscribed 3.6 times to total US$3.2 billion and is the first time a Sukuk has been used to pre-fund the acquisition of aircraft and is the first ever Sukuk financing for an A380.
"Emirates has always taken a diversified risk approach to our aircraft financing. We continually look for solid and innovative opportunities in the global market to finance our growing aircraft fleet, and we are very pleased with the tremendous response to this landmark transaction," said Nirmal Govindadas, Emirates senior vice president Corporate Treasury.
The deal, with a 2.471 yield over 10 years, was split 39 percent in the Middle East and Asia, 32 percent in Europe and 29 percent in the U.S. with approximately 47 percent picked up by fund managers, 38 percent supported by banks and 15 percent by insurance companies and pension funds. Govindadas added: "The strong and diversified investor demand for the offering is a testament to investor confidence in the strength of the Emirates franchise."
