Bestinvest says
This fund employs a ‘mild green’ approach to ethical investing in UK equities. This means that investing in certain industries is forbidden although companies that derive less than 10% of their earnings from gambling and alcohol production are allowed. The fund also seeks companies that make a positive contribution to society, rather than just eliminating those companies that produce negative externalities.
The research process takes the Standard Life UK desk's 'Winners List' as the starting point so investors are buying into that process which has a long and very respectable track record.
Its objective is to provide capital appreciation by investing in companies that meet certain ethical criteria. These criteria are largely determined by the use of the independently run EIRIS database, a popular screening tool for ethical investors.
The current exclusion criteria are companies that damage to Tropical Forests, Human Rights contraventions, production and supply of weapons and airlines. Annually, Standard Life poll investors about these areas of exclusion.
The more subjective area is around Oil & Gas with the management committee taking a view as to whether the company is unethical. Also gambling and alcohol stocks are only excluded where they derive >10% of their earnings from such activities.
The ethical criteria reduces the fund universe to 49% of the FTSE All-Share though this figure is not static.
The manager forms a large proportion of her portfolio from the Winners List - this is a list of the UK team’s highest conviction ideas in the All Share Index.