Ethical investment: Q&A with Ecclesiastical's Sue Round Go compare with our comparison table

Ethical investment: Q&A with Ecclesiastical's Sue Round

16 November 2010 / by Paul Dicken

Sue Round, head of investments at Ecclesiastical Investment Management, discusses socially responsible investment and the changes experienced by the industry.

1. Ecclesiastical have been at the forefront of ethically or social responsible investing for over 20 years, how has this area changed in that time?

In simple terms ethical investing is now a well understood and accepted option for the individual and institutional investor. There are now over 100 fund products available in the UK alone for the retail investor that cover almost every aspect of sustainable investing, from classic “avoidance funds” to themed funds investing around clean technology, renewable energy, timber, water and healthcare.

Sustainability is also the language of business – global companies now accept as read that corporate responsibility and sustainable operations are corporate priorities. That is a significant difference to the position 20 years ago, when ethical investment was a niche option, and businesses barely published so much as an environment policy.

2. Have the concerns and approaches pioneered by the ethical investment industry started to become part of the mainstream, with developments like the support for the Financial Reporting Council UK Stewardship Code?

The socially responsible investment (SRI) community can take some pride in spearheading the concept of focused engagement to improve business performance; the Stewardship Code is the latest example of attempting to harness the responsibilities of equity ownership which SRI investors have been doing for some years.

The Stewardship Code interestingly also enshrines the idea of collaborative partnerships to achieve results, which again the SRI community has long pioneered. There is still more than can be done, not least in persuading short term investors and analysts that business invests for the long-term and takes a holistic view of its entire operational impacts, financial and non-financial.

3. How do the teams working in the Amity fund range ensure funds are investing in socially responsible activities?

We like companies with business models attuned to an integrated, prominent sustainable agenda and whose managements understand that responsible business practices are not indivisible from business as usual.

Those sensibly managing and reducing their environmental and community impacts are likely to be the more successful over time. Tesco is held quite widely in the Amity range, and the achievement in the UK of its target to divert all waste from landfill (a year early) sets an inspiring example of what can be achieved at scale.

We conduct all of our due diligence at the ideas stage so that client capital is only placed when we are sure each company meets our required ethical criteria.

4. What skills or approaches have you found most useful for your work in socially responsible investment (SRI)?

Our investment style, based on a contrarian and well diversified bias has served us well over time. As mentioned, the funds are clear in the integration of an economic and SRI critique at the idea stage. Not only do companies have to clear the hurdle of our well developed negative screen, but also have to demonstrate social positives against our relevant nine positive screens.

As a small team we have also been able to bring a consistent style of investing over many years which has earned us a strong reputation for delivering consistent performance of profit with principles. The team brings a wealth of individual and collective experience in the analysis and selection of companies, which has delivered great performance and investment integrity over the long-term.

© Fair Investment Company Ltd

 Product NameISA OptionIncome YieldMore Info
Henderson Strategic Bondyes5.7%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Newton Asian Incomeyes5.43%More Info >
Income Paid Quarterly.The objective of the Sub-Fund is to achieve income together with long-term capital growth predominantly through investments in securities in Asia Pacific ex Japan (including Australia & New Zealand) region. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Newton Higher Incomeyes5.4%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes4.7%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Invesco Perpetual Monthly Income Plusyes4.46%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Woodford Equity Income Fundyes3.50%More Info >
Our selected partner for investing in Neil Woodford's Equity Income fund is Barclays Stockbrokers, via their INVESTMENT ISA for new ISAs and ISA transfers, or their MARKETMASTER® ACCOUNT for non-ISA investments. Income Paid Quarterly.The fund’s investment objective is to provide investors with long-term appreciation through investing in stocks primarily listed on the UK stock exchanges. Up to 20% may be invested in international companies. The income objective is 10% higher than the FTSE All Share Index yield with an anticipated annual yield of 4.0%.
Newton Global Higher Income yes4.7%More Info >
Income Paid Quarterly. The objective of the Sub-Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Jupiter Merlin Income Portfolioyes3.10%More Info >
Income Paid Quarterly. To achieve a high and rising income with some potential for capital growth by investing predominantly in unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The underlying funds invest in equities, fixed interest stocks, commodities and property, principally in the UK. See latest fund factsheet for details.
M&G Global Dividendyes3.27%More Info >
Income Paid Quarterly. The Fund aims to deliver a dividend yield above the market average, by investing mainly in a range of global equities. The Fund aims to grow distributions over the long-term whilst also maximising total return (the combination of income and growth of capital). See latest fund factsheet for details.
Kames Strategic Bond yes2.95%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
M&G Optimal Incomeyes2.44%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
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**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

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