A few years’ ago, we felt that it was important to offer our client’s an alternative to our mainstream investment portfolios which are low cost and globally diverse.  But what does the green alternative look like?  We decided not to call our new portfolios ethical investments.  This is because what is ethical is different for all individuals.  Our ethos was a “do no harm” mandate and focussed more positively on the UN Sustainable Development Goals.  We did however screen out arms and tobacco as these were the main issues that our clients were concerned about.

Then we looked at:

  1. Track record – whilst we can’t stop market “shocks” as what happened in March 2020 due to the pandemic, this sort of stuff happens regularly but perhaps not at this level every year (!) we do feel responsible for our clients’ future plans and look to use a fund manager who has a good track record in the sustainable “space”.
  2. Is the fund available on the investment platform we use? We also wanted to make sure that there are no initial fees for investing in that fund as this would deplete our clients’ return.
  3. Ongoing fund charges – some “ethical” fund managers charge exorbitant fees. We think it’s possible to find funds which have reasonable fund charges but still fulfil a “do no harm” mandate.  The average cost of our ethical portfolios is around the 0.65% mark.  This is around 0.45% higher than our mainstream portfolios but still reasonably low.
  4. Only companies that have a clear environmental strategy of not wishing to harm the planet, have a clear socially responsible ethos (diversity/equal pay) and transparent working practices.

Our moderate risk sustainable portfolio (60% equities 40% fixed interest) has generated around 29% over the past 2 years taking the pandemic into account.  So you are not swapping returns for being sustainable.


Risk warning to all investors:
The value of investments in any financial assets may fall as well as rise. Investors may not get back the amount they originally invested. Past performance is not an indicator of future performance. Potential investors should not use this document as the basis of an investment decision. Decisions to invest in any fund should be taken only on the basis of information available in the latest fund documents. Potential investors should carefully consider the risks described in those documents and, if required, consult a financial adviser before deciding to invest.