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Avalon and Minerva fill gap with socially responsible DFM

The risk-graded socially responsible portfolios form a discretionary fund management service that enable IFAs to outsource the management of socially responsible/ethical funds for their clients.

The portfolios were developed by The Ethical Partnership director Jeremy Newbegin, who was unable to find a DFM with in-depth experience of socially responsible investments.

Newbegin established the portfolios with the Avalon platform and Minerva Fund Managers for his own clients at the end of last year, but they are now being rolled out to the wider IFA market. They are available through Avalon’s Freedom portfolio, Freedom Isa and Freedom Sipp wrapper products.

The portfolios have a light green ethical approach, which enables them to focus on funds that include companies that meet positive socially responsible criteria, rather than excluding companies on the basis of negative factors. This light green strategy broadens the range of funds available to the portfolios, which gives them more scope to outperform.

There are five risk-graded portfolios, each containing seven to 10 funds chosen and screened by Newbegin and Minerva investment director Paul Warner, who is responsible for the asset allocation.

The portfolios are available for lump sum investments of at least £5,000, but monthly subscriptions are available only on the balanced growth and adventurous saver portfolios. These portfolios exclude investment trusts so monthly investors do not have pay the dealing charges.

Green issues have become mainstream and are regarded as an investment theme of the future, so interest in socially responsible investments is more likely to come from a wider investment base than in the past. This DFM could be useful for IFAs who want to offer a specialist socially responsible service to their clients, but lack the time, knowledge and experience to put together a portfolio themselves.

However, it is unlikely to attract ethical investors who prefer a stricter, dark green investment strategy.


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