Investors sitting on savings earning little or no interest can now choose to put their money to work for a philantropic purposes.
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Fund manager Nikko Asset Management New Zealand (Nikko AM NZ) has launched the Freedom Fund, which would use 100 percent of returns from the otherwise dormant capital to support the fight against modern slavery and human trafficking.
Nikko AM NZ managing director George Carter said the fund was innovative and timely, as the global pandemic had shifted the focus away from supporting charities.
"We hope the fund will have wide appeal. However, we think it may be of particular interest to philanthropic investors, trusts and businesses seeking to continue their commitment to positive social impact in these challenging times," he said.
The fund was designed for individuals and business with funds in low risk savings, which was otherwise earning little by way of a return on investment.
The actively managed Freedom Fund would target an annual return of around 2 percent, but rather than generate income for the investor, 100 percent of the pooled returns would be donated directly to non-profit charitable organisation Tearfund NZ.
"There are an estimated 40 million victims of slavery in the world today, and over two-thirds of these are in the AsiaPacific area," Carter said, adding Nikko and its partners would also work to raise awareness about the prevelance of slavery, which was not widely recognised in New Zealand.
The donations would be exempt from tax, and Nikko AM and their service providers would cover the operating costs and donate their management fees.
Investors would retain the flexibility to withdraw their money from the fund at anytime.
"By allowing us to employ our investment expertise to use some of their savings or capital to generate income, we're providing a new option for them to donate without donating, while still being able to access their money at any time," Carter said.