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Restructure boosts ethical fund

Credit Suisse Asset Management believes the recent restructure of its multi-manager ethical fund will enable it to benefit from the trend towards companies reinvesting for growth rather than paying dividends.

Since acquiring the CS multi-manager ethical fund from Artemis a year ago, CSAM co-heads of multi-manager Gary Potter and Robert Burdett have made several changes to the portfolio, increasing the number of holdings from eight to 12.

They then moved the fund out of the Investment Management Association’s all companies sector into the specialist sector to bring greater geographical diversification to the fund. The criteria on which stock selection is based was also widened to include companies that are ethical in nature.

Credit Suisse says the changes have enabled the fund to jump from 81st to 38th in the Lipper Hindsight rankings of all ethical funds.

Standard & Poor’s figures released in May rank the fund 21st out of 35 funds in the IMA specialist sector over one year based on £1,000 invested on a bid-to-bid basis with net income reinvested.

Burdett says: “Each of the four investment themes we have identified has different performance characteristics. At the moment, we favour sustainable world and ethical by nature. Fund managers want companies to reinvest in their businesses rather than pay out dividends. The market is wrestling with this trend and we needed to expose the portfolio to it.”

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