First global Fair Trade fund launched
responsAbility is launching the responsAbility Fair Trade Fund, the first investment fund targeting the development potential of small farmers in developing economies. The responsAbility Fair Trade Fund, which was set up in close cooperation with the fund management company Credit Suisse Funds AG and licensed for public distribution in Switzerland by FINMA, provides easy access to a widely diversified and professionally managed portfolio in the agricultural segment. The fund enables investors to gain financial returns while supporting fair trade and improving the lives of small farmers in developing economies.
Bananas, chocolate, coffee – fairly traded products are proving increasingly popular. Most of this agricultural produce comes from small farmers in developing economies. Such farmers often face an array of challenges such as insecure food supply, lack of access to markets, little negotiating power, volatile commodity prices, and depopulation of the countryside. Furthermore, they lack the know-how and financial resources to increase their output and efficiency.
Fair trade opens prospects for small farmers
A highly positive, market-oriented approach to improving the economic position of small farmers over the years has been fair trade. Its key features are a guaranteed minimum price for produce and what is known as a fair trade premium. The guaranteed minimum price assures a basic subsistence income for small farmers, protects them from fluctuating commodity prices, and enables them to plan with security. Cooperatives play a central role, acting as the link between small farmers and the markets. They handle many vital tasks such as financing, trade, processing, training, and fair trade certification.
Fair trade: a growth market
Growth in demand has been very pleasing, with annual growth rates standing at around 20%. However, growth also increases the need for finance, especially for the cooperatives. Without this working capital, cooperatives and small farmers cannot profit, or can only profit to a limited extent, from the growth in fair trade.
Enabling growth – profiting from development
This is where the worldwide unique responsAbility Fair Trade Fund, classified as “Other funds for alternative investments” associated with particular risk (“responsAbility Fair Trade Fund”), comes in. The fund provides working capital to agricultural producers and trade organizations (usually cooperatives) to export or prefinance their harvests, for example. To a lesser extent, it also funds the procurement of means of production. Most of its investments are placed in fixed-interest debt securities, issued by cooperatives for terms of up to one year.
The responsAbility Fair Trade Fund has been open for subscription by investors with a medium- to long-term horizon since December 21, 2011. Little correlation with other asset classes and stable returns (historic values) also make this investment fund an ideal means of portfolio diversification.
A Swiss investment fund, the responsAbility Fair Trade Fund is the first of its kind in the world to simplify and professionalize access to fair trade investments for a broad range of investors. Only close cooperation and exceptional commitment by specialists of all parties involved have made this possible. Apart from responsAbility Social Investments AG (responsAbility), Credit Suisse Funds AG and the Swiss Financial Market Supervisory Authority FINMA played a major role.
Being licensed to sell to the public in Switzerland is very important to responsAbility. Our clients appreciate Switzerland’s security and regulations that serve to protect the investors. The responsAbility Fair Trade Fund is further proof of the innovative strength of our financial center,” explains responsAbility CEO Klaus Tischhauser.
Since its foundation ten years ago, responsAbility has specialized in investment solutions with an emphasis on development. Its investments in developing and emerging economies contribute to positive development in society, while targeting long-term investment returns. responsAbility already boasts a track record of around seven years (USD 125 million invested) in fair trade. It deploys an experienced team and a global network. Since inception in December 2011, the responsAbility Fair Trade Fund has facilitated an additional USD 10 million of finance.
Fund facts: responsAbility Fair Trade Fund
responsAbility Investments AG
Ulli Janett, Media Relations
Telephone: +41 44 403 06 33
ulli.janett [at] responsAbility.com (e-mail: )