Five top rated ethical and socially responsible funds

Posted by on August 31, 2017

More and more people are questioning whether the traditional approach to investment, which has advocated the accumulation of wealth at almost any cost, is too one dimensional. 

Can such a single-minded objective really insulate you from the many issues we are all facing?

While some have no problem choosing companies based solely on the likelihood of a good return, others consider it their social responsibility to invest in accordance with their beliefs and values.

Damien Lardoux portfolio manager EQ Investors outlines what he thinks are the top five funds for individuals who seek to invest in a socially responsible manner

Damien Lardoux portfolio manager EQ Investors outlines what he thinks are the top five funds for individuals who seek to invest in a socially responsible manner

Impact investing, in which investments are bound by environmental and/or social considerations, alongside an attractive financial return is a booming sector. 

About $114billion (£88billion) in assets are under some kind of impact investing strategy across the world, and this is forecast to reach $1trillion (£770billion) by 2020.

Impact investing has the added benefit of benefiting your children and their offspring. Many of the world’s biggest problems – resource scarcity, clean energy, education, housing, urban transformations, require significant investment.

Impact Investing is becoming more and more accessible to UK retail investors with close to 100 funds currently available. Here are five funds for you to consider for your portfolio:

Impax Environmental Leaders Fund – OCF: 0.80

Impax Asset Management is an independent environmentally-focused asset management company with, we believe to be, the largest and most experienced team in Europe.

Whilst the Impax Environmental Leaders fund launched in 2016 for UK investors, Impax Asset Management has been successfully managing the same strategy investing in large environmental companies since 2008. 

The fund invests in fast growing companies in the energy efficiency, renewables, water and waste management sectors.

What is the ongoing charges figure (OCF)? 

The ongoing charge is the investing industry’s standard measure of fund running costs.

It measures the total costs associated with managing and operating a portfolio including the manager’s annual charge, custodian, performance and auditor levies as well as one-off charges.

The bigger it is, the costlier the fund is to run.

The ongoing charge figure can be found in the Key Investor Information Document (KIID) for any fund, usually at the top of page two. 

FP Wheb Sustainability FundOCF 1.05 per cent

The FP Wheb Sustainability fund looks to hold a portfolio of stocks from a universe of stocks that play into nine social and environmental themes including resource efficiency, sustainable transport, education and healthcare.

It is managed by an experienced team, which for the last 15 years has been one of a handful of specialist fund managers within the sustainability arena who actively seek out companies providing positive solutions to various sustainability issues, rather than more simply only applying negative screening approaches to exclude controversial industries.

Their recent impact report published in May shows how the fund is positioned to help tackle what global governments consider as being the world’s 17 most pressing issues, known as the UN’s Sustainable Development Goals.

F&C Responsible Global Equity Fund – OCF 0.82 per cent

Launched in 1987 as part of the Friends Provident Stewardship range of funds, it was the first in the UK to screen out a number of controversial sectors.

Since then, the fund has significantly changed its investment process to emphasize the importance of investing in companies that are contributing to global sustainability. 

The strategy focuses on six main themes; technological innovation, healthcare, responsible finance, resource efficiency, sustainable mobility and energy transition.

Investors can access a well-diversified portfolio and a strategy that has been outperforming its benchmark and most of its peers over the short, medium and long term.

Allianz Green Bond Fund – OCF 0.47 per cent

Green Bonds are a relatively new asset class but an area which has been growing since the 2015 Paris Climate Summit recognised the urgency of financing environmental projects to address climate change issues.

Green bonds are fixed income instruments where the proceeds are exclusively assigned to finance projects, assets and business activities in sectors such as energy efficiency, pollution prevention, renewable energy, clean transportation or water management.

The Allianz Green Bond fund is the first fund made available to UK retail investors to invest in these green bonds. It is managed by an experienced team that makes sure that the selected projects have a high impact on the environment while not being detrimental to society.

More and more investors are seeking out investment solutions that are aligned with their beliefs and values in an age where information on companies'practices  are readily available 

More and more investors are seeking out investment solutions that are aligned with their beliefs and values in an age where information on companies’practices  are readily available 

Columbia Threadneedle UK Social Bond Fund – OCF 0.44 per cent

The Columbia Threadneedle UK Social Bond fund seeks to achieve a positive social impact by investing in listed bonds issued by organisations that support socially beneficial activities and balanced economic development, primarily in the UK. 

Managed by an experienced fund manager in Simon Bond, key social themes include employment, education, social housing, transport and infrastructure.

The fund was launched in 2014 through a partnership with Big Issue Invest, the social investment arm of The Big Issue Group and is to date the only bond fund available to investors with a key focus on solving the most critical social issues in the UK.

The EQ Positive Impact Portfolios invest in a broad mix of between 20 and 25 funds and are for investors who prefer to invest in industries and businesses that aim to deliver social and environmental benefits through their activities 





Courtesy: Daily Mail Online

Posted in: Investing

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