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Marlborough takes inspiration from Rowntree Trust

Marlborough Fund Managers

Ethical Fund

Type: Oeic

Aim: Growth by investing in an ethically screened global portfolio of companies

Minimum investment: Lump sum 1,000

Investment split: 100% in an ethically screened portfolio of global companies

Isa link: Yes

Pep transfers: Yes

Charges: Initial 5.25%, annual 1.5%

Commission: Initial 3%, renewal 0.5%

Tel: 0808 145 2502

The Marlborough ethical fund is an Oeic that aims for growth by investing in a global portfolio of ethically screened companies. Its ethical criteria of the Marlborough fund will be based on that used for the Joseph Rowntree Charitable Trust. It will focus on companies with products and ser vies that are beneficial to society, meet basic needs rather than luxuries, but which also profit in line with economic growth. Companies involved in activities and industries such as armaments, alcohol, gambling, pornography and tobacco will be avoided.

Capital Trust Financial Management partner Bruce MacFarlane regards the fund wrapper as standard fare with typical charges and adviser remuneration. The product is seeking to appeal to IFAs and their clients who have a requirement to invest ethically. Ethical and socially responsible investment choices are now an integral part of the know your client process and with clients being made aware that these types of product are available, demand is on the increase. he says.

MacFarlane feels that advisers who can show clients that they are taking into account their values and proactively taking an interest in them for more than just their money are more likely to retain their business and attract new clients via positive referrals. Socially responsible investing is still a niche market and therefore offers marketing opportunities to a largely untapped audience. It is being increasingly argued that not checking a clients attitude to socially responsible investment issues is negligent by omission in the same way as not ascertaining a clients attitude to risk. he says. From a compliance point of view, MacFarlane believes the ethical question is a key part of the financial advice process.

However, there are so drawbacks that MacFarlane highlights. Sound ethical investments are full of many positives providing a benefit for the environment, social and individual prosperity and generally for all aspects of society. Nevertheless there is still a chance that the investor could lose investment opportunities by being excluded from investing in companies deemed unethical by the fund mandate which may have produced better financial returns, he says.

In MacFarlanes view one of the main concerns about ethical funds underperforming their non-ethical peers is usually the absence of larger capitalised companies such as those found in the FTSE 100 share index. Past performance shows that many ethical funds outperform during periods of string stockmarket growth but also underperform during periods of weak or negative market returns, he says.

Looking at which funds are likely to compete with this one, MacFarlane says: Funds under management in ethical investment schemes are still very small compared with the total held in investment funds. While new funds are being offered on a regular basis, the best known is Friends Providents stewardship fund.

Summing up MacFarlane says: For many ethical investment is not only about achieving a good long-term capital appreciation on their money but also by making a positive statement that this can be done with concern and respect for wider social issues.


Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Average

Overall 7/10


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