PortfolioMetrix is launching a range of Ethical Emphasis portfolios in the UK that utilise funds which put environmental, social and governance (ESG) at the centre of their investment processes in order to drive positive social change.
Mike Roberts, Managing Director of PortfolioMetrix UK comments: “From feedback we’ve been getting we know there is a real appetite for ethically focused investment portfolios so we are pleased that we have been able to develop a solution for our end clients. The whole area of socially conscious investing is a complex one, with the shade of ‘green’ required by investors varying greatly from person to person. But we believe we have come up with a set of widely applicable portfolios, based on solid social principles yet still focused on delivering good returns within a risk managed framework.”
The funds selected for the portfolios focus on positive screening: using an active research function to determine the social and environmental effects of potential investments. However, advisers can choose a cheaper passive option for clients, although passive ethical investment vehicles tend to be limited to negative screening and so are ‘lighter green’ than their actively managed counterparts.
The Ethical Emphasis range sits alongside the PortfolioMetrix Core Proposition of risk-rated portfolios.
The stated key features of the Ethical Emphasis range are:
- Focus on achieving a positive social and environmental impact without sacrificing clients’ financial objectives.
- Through its constituent funds, seek to invest in securities which strongly benefit society.
- Through its constituent funds, seek to improve the behaviour of the companies that are featured in the portfolios.
- Choose funds that explicitly seek to avoid investing in companies whose business models are misaligned with sustainability principles.
Nic Spicer, PortfolioMetrix’s UK Head of Research comments: “As individual investors have different concepts about what exactly is positive or negative from a societal point of view, we recognise that it isn’t possible to design a cost effective and diversified multi-asset approach that will suit every single socially conscious investor or exclude every security that could be considered problematic. With this in mind, our Ethical Emphasis portfolios have been designed with some flexibility to be customised, and to focus on investing in companies widely considered to have positive social attributes and to screen out those widely considered troubling, with the expectation that this will be appropriate for the majority of socially conscious investors.”
The Ethical Emphasis range will be available via the Transact, Wealthtime and Praemium platforms, with other platforms expected to go live later in the year.