Recently, the first responsible/ SRI equity fund with a focus on Central and Eastern Europe has been launched: The ESPA VINIS STOCK EUROPE EMERGING invests in ca. 50 companies in Central and Eastern Europe, which show above average socially and environmentally awareness. The fund was launched as part of the VINIS brand (for sustainability) and is managed by ERSTE-SPARINVEST, the asset management company of Erste Bank and the Austrian Sparkassen (savings banks) with AuM of EUR 28bn. The ESPA VINIS STOCK EUROPE EMERGING is the sixth sustainability fund within the "ESPA VINIS" range of funds. For the moment the fund is eligible for distribution in Austria only.
Experts in the field of (socially) responsible investment use a multi-layer process to select the portfolio holdings for the ESPA VINIS STOCK EUROPE EMERGING. There are strict criteria used for the selection process (avoidance of environmental pollution, child labour, nuclear energy etc.). For this very product, SRI fund manager Wolfgang Pinner sets up a target portfolio based upon a well-diversified regional mix, consisting in particular of the countries Turkey, Russia, Poland, Czech Republic and Hungary.
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The fund covers diverse up-to-date investment topics. Russia is one of the major beneficiaries of the current boom in raw materials and the need for investments in respective infrastructure. One the other hand, growth rates in the new member states are about twice the level of the "old" EU countries. According to Wolfgang Pinner "there is a lot of catch-up potential with regards to consumer spending but also in the financial service sector, which should lead to an indeed dynamic development. " In all of the countries mentioned huge investments in infrastructure are to be expected over the next years. Billions of Euros will have to be spent not only into the expansion of the road and railway networks but also in waste water systems and energy generation plants.
Wolfgang Pinner argues that "it will undoubtedly become more important for companies in the CEE region to look beyond the strictly short-term financial horizon and therefore to meet Western European standards in terms of sustainability and CSR. " What is more, there is a growing pressure on corporations from the side of investors to take ethical and sustainable principles seriously, especially with regards to their policies and corporate behaviour.
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