AIG Life Canada has added 17 socially responsible funds to its universal life policies. These new options are available as part of the Life Dimensions universal life insurance product line.
The insurer’s Internet platform investiPRO lets investors choose from among a total of 400 third party mutual funds. New additions include well-known socially responsible players Acuity, Criterion, Ethical Funds and Meritas Financial, as well as a Mackenzie fund.
Fees charged for these options range from 2.00% to 2.50% for the policy with bonus and from 0.75% to 1.25% for the reduced fee policy.
This line comes at a perfect time because investors are greener than ever, says Steve Carter, marketing vice-president at AIG Life. Investors used to think that socially responsible funds were poor performers, mainly because they steer clear of certain stocks due to ethical screening criteria. But today investors have seen the green light, Mr. Carter adds. They now realize that many ethical funds deliver excellent returns.For instance, one AIG Life offering, the
Acuity Clean Environment Equity, posted an average return of 19.82% over a five-year period ending December 31, 2007. For the same five-year period, the Ethical Special Equity fund posted an average return of 19.15%. The 5-year return of other funds varies between 6.02% and 17.51%. The only fund in the bunch that had an average negative return during this period is Meritas US Equity, at -3.15%. Four of the 17 funds have no historical returns.
The Jantzi Social Index also proves that socially responsible funds can hold their own, Mr. Carter explains. This index has specialized in social screening since its inception in 2000. It consists of 60 Canadian companies that meet social and environmental criteria.
Between January 1, 2000 and March 31, 2008, Mr. Carter says the average return of the index, a benchmark for ethical funds, was 7.91%. This is a mere 0.03% shy of the performance of the S&P/TSX60 index during the same period.