19th October 2015
FundCalibre launches responsible investing sector
The latest enhancement to FundCalibre, the free, independent fund ratings website, is the addition of a ‘Responsible Investing’ sector.
Responsible investing in the UK has been around for almost three decades, with the advent of ethical investment funds. During these 30 years, the range of funds available has grown and the investment process, in many cases, has also evolved. Today there are ethical funds, socially responsible investing funds, funds which give money back to the regions in which they invest, and many more variants.
FundCalibre has chosen to launch a Responsible Investing sector to help investors find the best of breed funds in these types of category.
Commenting on the new sector, Darius McDermott, managing director at FundCalibre, said: “To us, responsible investing covers a number of areas including, but not exclusive to, sustainable, socially conscious, environmentally responsible or ethical businesses. Funds which gain an Elite Rating in this category may invest in any asset class and their level of ‘responsibility’ will vary. Some funds will use negative screens – avoiding certain investments. Some will have positive screens – looking for, and encouraging, good practice. Others will have a combination of both. Some will look instead to invest back into the region or asset class for the benefit of local people and business development.
“At launch we have four Elite Rated Responsible Investing funds and a possible two more to follow shortly.”
With the likes of the Governor of the Bank of England, Mark Carney, joining the debate on the potential costs of climate change, and highlighting the impact it could have on investors, the directors of FundCalibre believe that these funds will play an increasingly important role. It is therefore important that potential investors understand the different nuances of the funds, so that they can pick the best fund to match their own views.
Elite Rated funds in the Responsible Investing Sector:
EdenTree have put ethical investing at the very core of their business. They are charity owned and were one of the pioneers in socially responsible investing in the UK. Sue Round is one the country's longest running ethical managers, with more than 25 years’ experience in the industry. She has been at EdenTree since 1984 and running this fund since 1988 and, as such, knows her stocks inside out.
FundCalibre view: As pioneers of responsible investing, EdenTree offer even the most discerning client a justifiable investment opportunity. Having a large number of smaller companies makes the fund very different from its peers.
This fund invests in quality investment grade bonds. It has a higher income target than most of its peers at 5-7%. Ethical exclusions are simple: no mining, arms, gambling, pornography, animal testing, nuclear power, alcohol or tobacco, which rules out about one third of the index. All positions must also have at least one positive environmental, social or corporate governance quality.
FundCalibre view: This fund typifies stable management, with the manager having been there for over 10 years. It has managed to outperform regardless of its ethical constraints, illustrating that income and ethics can be combined without sacrifice. It is a solid core investment grade fund.
This fund encapsulates the best ideas from the experienced team at Standard Life Investments, which manager Lesley Duncan uses alongside a 'no compromises' ethical screening. The ethical screen is influenced by an ethical committee and the results of a regular survey of investors. This will give acceptable and preferred stocks, from which Lesley will discuss ideas with the rest of the team, and pick her best stock ideas.
FundCalibre view: With a yield of nearly 3%, this fund offers something different from other ethical funds. It is still invested in UK equities, and has the weight of Standard Life's considerable research team behind it, plus a consistent and conscientious manager in Lesley Duncan.
First State Stewart put their sustainability screen at the start of their investment process, highlighting firms which have a positive impact on society, the environment and health, have a responsible financial model and credible infrastructure in place. They will then assess the quality of the company, plus its current and future valuation. They will regularly engage with corporate management to get a full understanding of the above criteria.
FundCalibre view: As with many First State Stewart funds, this fund has enjoyed excellent performance, and covers an under-utilised area of the market. The mandate may not provide the depth of ethical cover of other funds, but the pragmatic approach still provides responsible investors an outlet to the Asian markets. It is currently closed to new investments.
FundCalibre provides ratings to all the best funds, even those that are closed to new investments.
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