Ethics or growth? Why choose? The Amity International Fund from Ecclesiastical Investment Management Limited.
Ethical investments are growing investments. Fact. Figures for the second quarter of 2011 show investment in ethical funds of £94.3 billion, the highest since the third quarter of 2007. Today, more and more investors are looking to ensure their money is invested ethically.
Yet at the same time, no investor wants to seriously compromise on returns. So, can a socially responsible approach to investment go hand-in-hand with consistently high performance? Our Ecclesiastical Amity International Fund suggests it can.
Launched in 1999, the aim of the Ecclesiastical Amity International Fund is to achieve long-term capital appreciation and a reasonable level of income by investing principally in companies that make a positive contribution to society and the environment through sustainable and socially responsible methods. So what does that mean in practice?
On a day-to-day level, Ecclesiastical seeks to avoid investment in areas such as companies with a material involvement in alcohol, tobacco and weapon production, gambling and publication of violent or explicit materials. Investments are spread internationally, including 12% of assets in Singapore, 11% in Hong Kong and across Europe (5.7% Germany, 6% France). This creates a diversified but successful geographical mix.
The results? The Amity International Fund ranks top quartile over three, five and ten years and since launch (as at 31.08.11), with a track record of consistent performance above the market, during both good and bad times. It has outperformed the Global Sector by 64.46% over the last decade and is rated ***** by Morningstar.
It also won the Lipper award for Best Fund over five years in 2011, and Best Fund over three years in both 2009 and 2010, the Moneywise Global Growth Fund Award 2010, Money Observer Best Global Growth Fund Award 2011 and Best Global Large-Cap Equity Fund in the Morningstar UK Fund Awards 2011.
Ecclesiastical is a unique company originally founded in 1887 and ‘Profit with Principles' remains the goal of our Socially Responsible Investment Team. This means we actively engage with companies prior to making a decision; and all investments are both negatively and positively screened. Ecclesiastical Investment Management Limited was awarded Moneyfacts Best Ethical Investment Provider 2009, 2010 and 2011 and is one of the UK's top 15 corporate donors, donating £55 million to charities in the last 15 years (source: The Guide to UK Company Giving 2011/12, Directory of Social Change).
Our award-winning Fund Managers are fully supported by an in-house Socially Responsible Investment Team who carry out thematic and stock-specific research to identify new ethically responsible investment ideas. This allows us to engage in discussion on a variety of ethical and socially responsible investment issues. For investors, it's an added layer of assurance that their money is being invested in companies that are contributing to a safer, cleaner, better world. Our published Amity Insight Reports demonstrate our approach to different market sectors and industries.
So far, our Amity Insight Reports have discussed the merits of investing in Affordable Housing, Oil, Nuclear Power, Cocoa, China and Pharmaceuticals - and demonstrated how our ‘Profit with Principles' approach works with each. For example, our recent update on the cocoa industry revealed that here has been real progress and industry commitment since 2008 to eradicate the very worst practices within the cocoa supply chain with "significant changes in attitudes and behaviour" and a reduced exposure of children to hazardous labour.
At Ecclesiastical we take pride in our independent analysis. We're not afraid to adopt contrarian positions and are in favour of long-term investment horizons. Our Fund Managers are unconstrained by rigid stock lists, permitting more flexibility to take advantage of good value opportunities as they present themselves and actively seek out companies with a record of involvement and good performance in terms of business practices, community relations, corporate governance, education, environmental management, healthcare, human rights, labour relations and urban regeneration.
We also use an independent supervisory panel to review all our stock buying decisions, policies and processes. The panel consists of senior financial, business, church figures and members of the clergy. Panel members receive Ecclesiastical's Financial and Social Responsibility research reports for analysis. They meet regularly with the Fund Managers and play a key role in ensuring we comply with our socially responsible criteria.
So can consistent performance and social responsibility go together? Our results demonstrate that not only is an ethical approach no barrier to performance, but that socially responsible investments are experiencing growth in a tough climate. Meanwhile, the Amity International Fund is proof our ethical values can provide consistent value for investors.
Robin Hepworth is Senior Fund Manager at Ecclesiastical Investment Management and has run the Amity International Fund since inception. Robin is Investment Week ‘Global Equity Fund Manager of the Year 2010 and a Trustnet Alpha Manager, placing him in the top 10% of all UK unit trust and OEIC managers.
Robin is both Citywire Selection listed and Citywire AA-rated (source: Citywire - for the three years to 31 August 2011, Robin had a Citywire AA-rating based on his risk-adjusted performance).
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