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What do our different portfolios provide?


Whichever portfolio you use, we can assure you that you are:

  1. Placing your funds with top quality fund managers;
  2. Enjoying the keenest charging structures;
  3. Highly diversified.

The various portfolios combine conventional assets, ethical selection and impact choices in a variety of ways. We use the analogy of a car to help explain these. Broadly put, there are three approaches:

  1. Traditional petrol cars (our conventional portfolios);
  2. Hybrid petrol / electric cars (our hybrid portfolios);
  3. Full electric cars (our full ethical or impact portfolios).

There are some other permutations of those components, but that gives you the gist.

Conventional portfolios invest in bond and stock markets with reference only to an analysis of potential performance, risk profile and costs.

Ethical funds invest across the bond and stock markets just like conventional funds except that a screen is applied to filter out the bonds or shares (stock) of institutions which breach certain ethical criteria or which fail to satisfy certain requirements – for example, avoiding companies involved in armaments, pornography or fossil fuels – and in addition, sometimes seeking out companies that are actively pursuing environmentally friendly policies. The emphasis here is to avoid harm and to pursue positive environmental and social themes.

Impact funds also seek to avoid harm, but they place your investment with companies that not only seek to provide a financial return but also seek to have a positive outcomes or “impact” – again this can be social or environmental (with a slight emphasis on greater environmental impact) when compared to the ethical funds.

Whereas a conventional fund has access to the full universe of investment possibilities, ethical funds screen out a significant proportion and impact investing starts with a smaller (but growing) pool. One consequence of this is that we would expect ethical and impact funds to have a higher level of risk to your capital, as they spread your investment ‘eggs’ across fewer baskets. They also tend to have slightly higher charges, as there is more work required by the fund managers to select assets than with a conventional portfolio.

It is for this reason that we also offer hybrid options. The hybrid portfolios integrate ethical or impact share funds with some conventional bond funds to achieve lower charges, greater diversification and lower potential investment risk than pure ethical or impact funds, so they are suitable for clients who are more sensitive to these factors.

Whilst you might think that we would expect higher returns from an unconstrained (conventional) fund, in fact that is not always the case – particularly as new technologies take off and society’s attitudes change. The focussed nature of ethical and impact funds can and often does produce better returns in certain seasons, but maybe lower returns in others.  Crucially, the difference between them and conventional portfolios, in terms of their risk and return ‘ride’, is not huge and good financial outcomes can be achieved whichever of these you select.

We are well versed in the range of options available to you, so if you would like to discuss this more please raise this with us.


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