Ethical Investing

Some investors prefer not to invest in certain types of company, such as tobacco or alcohol producers for example, so that their investment portfolio more closely reflects their principles and beliefs.

Our standard ethical criteria seek to achieve a pragmatic approach to ethical/socially responsible investing (SRI) by avoiding generally ethically unacceptable companies whilst including those with a sustainable remit or whose products or services concur with our core themes, within a bespoke format.

Investors in a bespoke portfolio may prefer to select their ethical criteria, in which case our ethical team will screen the investments in accordance with their specific ethical requirements.

We have a two stage process for investing ethically. The first filter is extensive research of companies suitable for the Thesis ethical universe amongst large and mid cap companies in the UK. These companies must have one or more of our positive criteria (such as good employment practices) to be considered in the first instance. The company must not have any involvement with taboo areas, eg armaments production.

This universe then has a second filter to ensure that the companies incorporated in such an SRI portfolio meet our similarly strict investment parameters before inclusion.

The Thesis ethical team will allow investment in companies which demonstrate strong positive criteria but which also have a small involvement in areas which are not entirely satisfactory. For example in alcohol sales, we would consider including a company if its sales are less than 10% of its total turnover, and for gambling, we would allow a company where its involvement is restricted solely to the sale of lottery tickets or scratch cards.

From non-UK equity assets, we seek out and research SRI-approved investments in many different asset classes that rank alongside plain vanilla investments. For example, the international equity growth, fixed interest and infrastructure exposures are achieved through carefully selected funds and trusts which are regularly monitored for their SRI and investment suitability on an ongoing basis.

Investors should note that ethical or SRI portfolios may offer more limited scope for returns than unconstrained portfolios. For example, they may not permit exposure to certain markets and investment types that could have more favourable prospects than ethical investments at a certain point in the economic cycle.

You can find out more about our Ethical Service by contacting one of our Investment Managers.