Ethical Investment Policy

We are grateful to be entrusted with managing your investments and take our responsibilities very seriously. Our principal aim is to use our talents and long experience to deliver superior returns for the portfolios we manage, but at the same time we strive to maintain a socially and ethically responsible vision.

What is Ethical Investment?

Our concept of ethical investment includes the promotion of socially responsible business practice through favouring investment in well-run companies, whilst avoiding investment in organisations with material interests in:

  Human rights abuse (bonded labour, child labour, political oppression etc) 

  Environmentally harmful areas (pollution, destruction of habitat etc)

  Socially harmful areas (tobacco, gambling etc)

However, the implementation of an ethical investment policy is open to interpretation, and a major complication is that, within the global economy, companies operate within a complex network of relationships with suppliers, customers and government authorities. It is unrealistic to hold any company responsible for the actions of all its associates.For example, if you decide as a matter of principle not to invest in a casino operator, what about the company that constructed its buildings? Or its advertising agency, its recruitment agency and its contract cleaners? Where to draw the line is unclear, since any company's corporate relationships fall within an ethical spectrum, rather than into distinct categories. 

Do our fund managers follow an Ethical Investment Policy?

We believe so. When valuing a potential investment, we take full account of the financial consequences of the risks, and in particular the ethical risks, taken by the company. We strive to be aware of these risks by careful research into the background of the companies we might invest in. Accordingly, we will value the earnings of a company that has good corporate practices more highly that those of a similar company running large ethical risks. For example, this approach effectively rules out investment in tobacco companies, since one major class action law suit might wipe out all shareholder value. It also encourages company managers to adopt good practices so as to attract investors, thereby increasing their companies' share prices.

At company meetings it is our practice always to exercise our votes, and to support full compliance with The Combined Code on Corporate Governance.Furthermore, we vote against executive remuneration packages that appear overgenerous, and against the re-election of all directors on the respective remuneration committees.

By bringing ethical assessment into the heart of the investment process and applying human judgement, we seek to avoid pitfalls encountered by other investment managers when constructing ethical portfolios in a mechanistic fashion. Such pitfalls include portfolio concentration and underperformance arising from buying over-rated companies.

We support the aims of organisations such as Ethical Investment Research Services (EIRS) in raising issues of corporate responsibility, and continue to monitor developments in ethical investment with keen interest.

We believe that our policy on ethical investment addresses the subject honestly, responsibly and practically, and that our existing and prospective customers may take comfort in this approach.