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Fondaction posts a return of 6.5% over six months



(Montreal) Sustainable investing pays off, argues Geneviève Morin, President and CEO of Fondaction. The 17% annual return unveiled by the labor-sponsored fund on Thursday is proof of this, she said.

The mission of the CSN fund is to invest in companies that have a positive impact on the environment and that have socially responsible practices. This strategy has demonstrated its competitive advantages, especially in times of labor shortages and supply chain disruptions, Judge Mme Morin.

“We chose companies that are inclusive,” she said in an interview. Well, when there is a labor shortage and others are having a hard time finding employees, our businesses are more attractive employers. ”

The attraction to local production has also helped portfolio companies cope with the vagaries of the supply chain. Mme Morin gives the example of the Quebec coat manufacturer Kanuk who “chose to make his coats in Quebec”. “It is sure that it was able to turn around much more easily than the companies which chose to save by extending their production chain”, she underlines.

Performance prospects and corporate environmental and social concerns have often been seen as opposing goals, but that is changing, says the executive. “There, it’s the opposite. When you don’t take care of it, your ESG risks, when you don’t take care of the environment, when you’re not inclusive, that’s where you find yourself in a bad way. ”

Fondaction’s next task will be to further analyze ESG data. The fund has created an “impact team” whose mission will be to analyze companies’ extra-financial data. “We are very anxious to put these elements in place,” she says.

The deployment of the project, which will require IT investments, will be spread over 2022 and 2023. With additional data on the impact of the companies in the portfolio, Fondaction will be better able to help entrepreneurs measure their social and environmental impact and to compare themselves to their peers. Fondaction, for its part, will be able to “target the best companies even better”.

Fondaction’s strategy focuses on three themes: the fight against climate change, sustainable agrifood and sustainable cities and communities.

The results

Fondaction’s share was pegged at $ 16.46 on Thursday, up 6.5% in six months, after the release of the workers’ fund’s half-year results.

For the 12-month period ended November 30, the labor-sponsored fund provided an annual return of 17%. Over the medium term, it will return 11.6% over three years and 9% over five years. These figures do not take into account the 30% tax credits on the first $ 5,000 contributed annually.

During the second half of the year, development capital investments produced a gross return of 10.4%. The “other investments” generated a gross return of 4.9%.

In recent years, the Quebec government has granted a more generous tax credit for contributions to the Fondaction than to the Solidarity Fund QFL in order to help the CSN fund grow.

Since last June, the tax credit has been the same for the two labor-sponsored funds. This additional assistance will have enabled Fondaction to build its expertise and increase its assets under management, which reached 3.34 billion as of November 30, 2021, underlines Morin.

During the second half of the year, more than 14,000 people joined Fondaction, bringing the number of shareholders to over 194,600. Share issues reached 220.1 million.

Fondaction’s portfolio includes 188 companies and 87 funds. During the semester, the workers’ fund deployed 160.3 million to 15 new companies and 10 new funds.

Remember that Fondaction suspended last Monday the possibility of contributing to the fund by a single payment. The contribution by periodic payment is always available.

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