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Highlights
- Equity Trustees (EQT) pays penalty over misleading fund disclosures
- ASIC flagged inconsistency in product claims vs. actual bond holdings
- Investors reminded to assess fund transparency amid ESG claims
Equity Trustees Limited (ASX:EQT), a key player in Australia's investment management landscape, has paid $56,340 in penalties following allegations from the Australian Securities and Investments Commission (ASIC). The claims relate to misleading statements made by its Artesian Green and Sustainable Bond Fund, a financial product marketed with a focus on environmental, social, and governance (ESG) investments.
Background of the Allegations
According to ASIC, the fund was marketed through various official channels, including its product disclosure statement and website, as one that invests specifically in corporate green, sustainable, and social bonds. However, a deeper review revealed that the fund had substantial exposure to government and supranational bonds—investment categories that did not align with the fund's marketed sustainability focus.
These discrepancies in disclosure occurred between 10 April 2024 and 7 November 2024. While Equity Trustees paid the infringement notices, ASIC emphasized that doing so does not equate to an admission of guilt or liability under the law.
ASIC's Emphasis on Investor Transparency
ASIC Deputy Chair Sarah Court stressed the obligations of responsible entities under the Australian Financial Services (AFS) licensing regime. She noted that having robust governance frameworks is critical to ensuring investment-related disclosures are accurate and do not mislead investors.
“A responsible entity must have measures in place to comply with its obligations as an AFS licensee,” Court stated. “This includes maintaining governance controls and ensuring public statements about investments reflect the actual asset mix.”
This action sends a clear message across the managed funds industry—particularly those touting ESG alignment—that transparency and regulatory compliance are non-negotiable.
Investor Perspective in the ASX200 Context
With Equity Trustees being part of the ASX200, the incident raises broader questions for investors tracking ASX200 stocks. Amid the growing demand for sustainable investment products, this case underscores the importance of verifying fund compositions against promotional claims.
As more investment products position themselves under the ESG umbrella, due diligence remains key. Investors are encouraged to review disclosures carefully and remain aware of regulatory updates that could affect the credibility and performance alignment of such funds.
While ESG-themed investment funds can offer long-term value, recent developments show the need for vigilance regarding how such products are structured and represented in the market.
