The company has its roots in the late 1980s, originally as the UK fund management arm of Swiss Life. In 2003, it was acquired by City firm King & Shaxson, which is part of the Philip Capital Group.
The new funds aim to get the best returns for investors while preserving the original capital, as well as taking into account ethical and environmental considerations. King & Shaxson’s socially responsible approach is active engagement, encouraging best practice among the companies in which it invests.
The green solutions fund invests in companies that are benefiting society and the environment by solving challenges such as global warming, transport congestion, an ageing population and demand for resources.
To be eligible for investment, the core activity of companies in this fund must be, for example, education and learning, energy efficiency and storage, environmental management, fairly produced and traded food and drink, healthcare and public transport. It will avoid companies which have a negative impact on people, animals and the environment such as air and road transport, nuclear power, pornography, gambling, intensive farming and animal testing for cosmetics.
The ethical balanced income fund is pitched as an alternative to higher risk equity-based funds and corporate bond funds, which have lower returns. It will generate income and growth, while preserving capital and providing environmental and social solutions.
This fund invests in a broad spread of assets including shares, fixed interest, commercial property and cash, so there is less reliance on one asset class. It invests in companies that are beneficial to society and the environment, but balances the risk by investing in ‘acceptable’ companies – those that meet the avoidance criteria but do not directly benefit the environment and society.
According to the company, excluding companies and investing in large companies that show best practice only goes so far and may not be radically different from conventional portfolios. It says some companies may be small and higher risk and while offering only modest returns, may have a huge contribution to make in socially responsible term. However, these companies may be difficult to trade and are likely to represent only a small part of the portfolio.
The company says it is pleased with the timing of these fund launches as equity markets are improving and the oil price is falling, which has benefited sectors such as public transport. The renewable energy sector also started to see good opportunities as the sector has cooled as a result of the oil price fall.
Both funds may to appeal to investors who want to strike a balance between their morals and returns but the ethical balanced income fund in particular offers a new slant in applying multi-asset investing to ethical investment. However, the inclusion of companies deemed acceptable but which do not actively benefit society or the environment may compromise some investors’ ethical ideas.