Aim: Income by investing in an ethically screened portfolio UK Government bonds and sterling denominated
Minimum investment: Lump sum £200
Investment split: 24% consumer cyclicals, 13% banks, 12% utilities, 12% government, 8% insurance, 7% industrials, 6% telecoms, 5% consumer goods, 4% healthcare, 4% real estate, 5% cash
Isa link: Yes
Charges: Initial 3.75%, annual 1.25%
Commission: Initial 3%, renewal 0.5%
Tel: 020 7680 5853
Ecclesiastical Investment Management has added an ethically screened bond fund to its range of socially responsible investment funds.
The Ethical Partnership director Jeremy Newbegin thinks that as there are not many ethical fixed interest funds, this fund will be welcomed at a time when ethical, socially responsible, and environmental concerns are growing at a fast pace.
In his view, this fund will be attractive to the conservative investor not wanting any exposure to equities, and the balanced investor looking for a fixed interest element to their portfolio.
“I like the fact that the fund invests not just in corporate bonds but also UK gilts, convertibles, preference shares and building society permanent interest bearing shares.
“Admittedly some investors may not be comfortable with the inclusion of UK gilts but it does reduce the investment risk which for some will be an acceptable compromise,” says Newbegin. He adds that the estimated yield of 5.7 per cent gross is also realistic.
Newbegin thinks Ecclesiastical – previously Allchurches – has to be applauded for going back to its roots. It observes that it has built on the experience of managing the Amity UK Equity Fund, which has a decent long-term investment track record, having been launched in 1988.
“The new fund has a good mix of avoidance and positive screening. The five key areas of avoidance – alcohol production, gambling operations, pornographic/violent material, and tobacco production will be attractive to many of my clients,” says Newbegin.
He also likes the inclusion of positive screening, which he says is reasonably far reaching, seeking out companies that offer products and practises which are helping to build a safer, cleaner and better world.
“Unusually the minimum investment level is very low – £200, which will be of major benefit to investors with smaller amounts,” he says.
There is not much Newbegin dislikes about the fund. he expects the main competition to come from Aegon, Norwich Union, Rathbones and Standard Life.
“Ecclesiastical has a proven track record with its higher income fund, managed since inception in 1994 by Robin Hepworth, who also manages the Amity International Fund). Robin will be joint fund manager of the new fund along with Chris Hiorns, who manages the Amity European Fund,” says Newbegin. He concludes: “I am particularly heartened by the fact that Ecclesiastical has its own “in-house” research team.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average