Good Money Week: Ten investment funds helping you make a positive impact
It’s Good Money Week (2 to 8 October 2023) which aims to bring together the financial services industry to consider how to help people make better choices with their pensions, savings, and investments, as well as better understand the positive impact they can have on the environment and wider society.
This week is the perfect opportunity for me to showcase a number of investment funds that are aiming to do all of those things! Because when we are investing for our future – or for our children’s future – doing so in a sustainable and responsible manner is becoming more and more important.
Here are 10 funds to consider:
1) Artemis Positive Future
This fund invests in innovative companies that have a transformational positive impact, through either environmental or social improvements. The process starts with excluding those companies which have a clear negative impact, as well as those involved in animal testing, weapons, and fossil fuel extraction.
The managers then identify companies with an above-market revenue growth with the potential to have a positive impact. The portfolio consists of companies offering products and services such as EV manufacturers, sustainable food, water and waste reduction, and healthcare software.
2) CT Responsible Global Equity
The managers of this fund will invest in companies that make a positive contribution to society and the environment, avoid companies with damaging or unsustainable business practices, and use influence as an investor to encourage best practice management of ESG issues through engagement and voting.
The constraints include no alcohol, gambling, pornography, weapons or tobacco, and the fund is fossil fuel free. There are also restrictions on environmental impact (with particular consideration to the Arctic and ecologically-sensitive operations), animal welfare, human rights, and labour standards.
3) Janus Henderson UK Responsible Income
Manager Andrew Jones has extensive experience in the equity income space and has a common-sense approach to this fund. The avoidance criteria are led by clients, with consultations every few years and come under three broad criteria: People, Environment and Animals.
They include industries such as fossil fuel extraction and power generation, animal testing, fur, chemicals of concern, alcohol, armaments, gambling, tobacco, and corruption. Jones won’t chase yield and will look for a balance of growth as well as an attractive income.
4) JPM Climate Change Solutions
As the name suggests, this fund invests in companies that are developing solutions required to address climate change. The key themes it seeks to tackle are renewables and electrification, sustainable transport, sustainable food and water, sustainable construction, and recycling and re-use.
The process begins with the use of ‘ThemeBot’ an AI investment engine, which employs natural language processing and big data to scan millions of sources to help identify companies that are most exposed to the climate change theme. The team then considers factors such as the attractiveness of the business, including its economic value creation, sustainability, and governance.
5) LF Montanaro Better World
This is a global equities fund looking for medium- and small-sized businesses whose products or services are making a positive impact on the world. The managers look for firms creating a positive impact. To identify these companies they have six impact ‘themes’: environmental protection, the green economy, healthcare, innovative technologies, nutrition, and wellbeing. And, in order to stay true to these themes, the team will also exclude companies that are causing harm, such as those involved in tobacco, weapons and fossil fuels extraction.
6) Liontrust Sustainable Future Managed
This multi-asset fund aims to deliver capital growth over the long-term (five years or more) through its own sustainable process and by investing in a combination of global equities, bonds, and cash. Every investment has to meet four set criteria: thematic drivers, sustainable credentials, good fundamentals, and attractive valuation.
Three mega trends have been identified, with strong and dependable growth prospects. These are: better resource efficiency (cleaner), improved health (healthier), and greater safety and resilience (safer). Within these three buckets the team has identified 20 areas of predictable and resilient growth.
7) Ninety One Global Environment
This fund has a unique approach – only investing in companies that will help the decarbonisation of the global economy. It is estimated that, in order to reach global temperature goals of a maximum 2C rise, $2.4trn per year will need to be spent or reallocated. This fund looks to tap into the companies that will benefit from that spending.
As well as avoiding creating carbon emissions, companies in the fund will also have to have at least 50% of their revenues from three sectors: renewable energy; efficient use of resources, and electrification.
8) R&M Global Sustainable Opportunities
R&M Global Sustainable Opportunities is a high conviction, value-orientated fund, that invests in companies of all sizes. It offers a real alternative to the average global sustainable fund, which usually comes with a large-cap growth style tilt. The fund’s favoured area is finding undervalued quality businesses. Its key sustainability objective is aligning with net zero by 2050. It’s interesting, different, and applying a proven process. The three main areas of focus are people, innovation, and the environment.
9) Rathbone Ethical Bond
Ethical research for this fund is provided by Rathbone Greenbank Investments, a dedicated ethical, sustainable and impact team of Rathbones, that works with the fund manager. After attractive corporate bonds are identified, companies are assessed against a number of positive and negative social and environmental criteria.
Negative screening excludes organisations involved in activities such as animal testing, alcohol manufacturing, fossil fuel exploration and production, arms dealing and gambling. Issuers involved in any negative criteria will be discounted. Positive practices include community investment, management of environmental impacts and provision of products or services that offer social or environmental benefits.
10) VT Gravis Clean Energy Income
Renewable energy is undergoing mass adoption – a trend which this fund taps into directly. It aims to capture a blended portfolio of the best listed vehicles across the developed market and give an anchor to portfolios through defensiveness and steady income. The resultant portfolio includes assets that derive energy from renewable, zero emissions sources, as well as companies saving energy through efficiency measures. This includes solar, wind and hydro-electric power, as well as energy storage, energy efficiency, bioenergy, geothermal, heat pumps and the smart grid.
Juliet Schooling Latter is research director at FundCalibre