The M&S Money ethical fund aims to cater for investors with a mid-green ethical profile who want to invest without compromising their principles.
It will focus on companies that make a positive contribution to society or the environment and will avoid those that derive more than 10 per cent of their revenue from activities such as gambling, the fur trade, armaments and hard-core pornography. Companies that have a poor environmental record, businesses involved in non-essential animal testing and firms that use child labour will also be avoided.
HSBC’s multi-manager team has appointed two underlying managers to run the fund – Jupiter and Sinopia Asset Management, which is part of HSBC Group. They have been chosen because their approaches are believed to be complementary.
Jupiter was selected on the basis of 18 years experience in managing green funds. It will take a thematic approach, drawing on its in-house research team to identify firms making an effort to be environmentally and socially responsible and firms trying to find solutions to environmental and social problems. Sinopia was chosen for its quantitative approach, based on stock-grading criteria provided by research specialist Innovest.
HSBC spokesman James Thorpe says: “To make it dark green would have made the fund too risky. If it completely ruled out gambling, for example, it would have to exclude big retail companies that sell lottery tickets. Gambling is not a big enough part of these businesses for it to have a high social impact.”