Robo firm Wealthify launches ethical portfolios

Concept of green plant grow on British Pound currency note.Robo-investment service Wealthify has launched ethical investment portfolios that can be opened with a £1 investment.

Wealthify now offers five ethical portfolios investing in up to 25 funds.

The company’s chief investment officer and co-founder Michelle Pearce says the launch is the firm’s response to customer demand for investment options that do not compromise their values.

Pearce says: “We want to democratise investing and give our customers the opportunity to invest in line with their principles.”

Wealthify’s new investment portfolios use active funds from Edentree, Kames Capital, Liontrust, Legal & General, Royal London, UBS, Stewart Investors, iShares, and Vanguard.

These providers will give negative screening for “sin stocks”, positive screening for companies with exemplary ESG practices and identify improving companies.

Continuous underwhelming ESG performance would disqualify the company from the fund. Fund providers will also use the shareholders influence and vote to further elevate companies’ EGS standards.

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Pearce says: “All fund providers are signatories of the Principles of Responsible Investing, the world’s leading proponent of responsible investing. Additionally, we know these fund managers can effect positive ongoing change in ESG standards via proactive shareholder involvement.”

Wealthify’s investment team will also monitor the underlying investments to ensure that the investor’s money is used to fund companies with ethical investment standards.

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Wealthify cites extensive researching and monitoring companies’ ethical principles as a reason behind investment higher charges for ethical funds (0.54 per cent compared to 0.21 per cent for standard plans).

Based on a £10k investment Ethical plans  
Cautious Tentative Confident Ambitious Adventurous Average
Fund Charges 0.42% 0.46% 0.52% 0.6% 0.69% 0.54%
Spread Costs 0.003% 0.02% 0.03% 0.04% 0.05% 0.03%
Total cost incl. annual management Fee (0.7%) 1.12% 1.18% 1.25% 1.34% 1.44% 1.27%
  Standard plans  
Fund Charges 0.18% 0.21% 0.24% 0.27% 0.29% 0.24%*
Spread Costs 0.12% 0.13% 0.13% 0.15% 0.16% 0.14%
Total cost incl. annual management Fee (0.7%) 1.0% 1.04% 1.07% 1.12% 1.15% 1.08%

Source: Wealthify

*The average fund cost across all Wealthify plans is 0.21 per cent. The company says 0.24 per cent is the average across higher value plans (above £2,000).

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