HAPPY BIRTHDAY TO US!

Later this month we celebrate the 30th anniversary of our Ethical Equity Fund. And what a 30 years it’s been.

There’s been major nail-biting moments in the financial world, but there’s also been a lot of positive progression, with finance as well as other industries like pharmaceuticals and technology.

But there’s one thing that hasn’t changed in this time… yes, you guessed it- our love of all things ethical. Our commitment to responsible investing, and the approach we take to achieve this have survived all the ups and downs of the last 30 years of equity markets. What is it they say? Build-measure-learn… well we’ve had 3 decades to do this.

We’re not claiming this was a flawless journey, but the experience we’ve gained during this time has allowed us to launch a range of new ethical and sustainable products off the back of our expertise. Our most recent launch was that of the Global Sustainable Equity Fund which turns 3 years this month… double the celebrations for us!

So what is responsible investing? Why should you care? … For us, it’s an unbeatable combination of active management and engagement. Active management is ESG management! I know this might sound a bit out there… but we seek the advice of our clients, we ask them what they want, and we tailor our ethical exclusions to that. And not just once, we do this regularly. Because, after all, everyone is learning about ethical practices and the more they learn the more interested they are. So it’s only fair we let our exclusions reflect their changing wants.

Then it’s down to us- the ones managing the fund. Active management is key. And more than that, we think bottom up stock selection is essential. By knowing all we can about the individual companies we find the hidden gems- the attractive growth businesses (specifically in the midcap arena).

Investing responsibly and ESG has rightly moved up the agenda for most individuals and businesses. New Fund launches have been notable as has the re-badging of existing product in the ESG and Sustainability Themed space;

There were 66 new ESG passive funds launched in 2018, taking the total to 205! (Source: Portfolio Adviser). More product choice for the end investor IS a good thing, however, it is KEY that investors understand what they are investing in.  Are you really looking under the bonnet of these funds? Some of these use third party ratings agencies to screen for ‘good’ and ‘bad’ stocks, which is no bad thing- but you cannot solely rely on this, as discussed here.

Doing your own ESG research deepens your knowledge and strengthens the conviction of your decisions. We will not invest in a company we haven’t spent time looking in to ourselves.

Then once invested, do we sit back? No. We communicate regularly with management teams and regularly challenge them; whether it be on strategy or ESG issues. Where issues cannot be resolved we as active managers sell those shares.

We have been a champion in the space for 30 years and look forward to the next 30…

 

About the author

Audrey Ryan is an investment manager in the UK Equities team with responsibility for managing several funds. In addition, Audrey has analysis duties for the travel & leisure sector, and is a small-cap specialist. She joined us in 1997 from General Accident where she was a UK small companies portfolio manager. Audrey studied Accounting at Napier University, is a qualified chartered accountant and has an MSc in Investment Analysis. She has 24 years’ industry experience*. *As at 30 November 2018.

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