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Newton to launch SRI fund for charities
by Danielle Levy on Apr 30, 2010 at 10:00
Newton Investment Management is to launch a dedicated socially responsible investment (SRI) fund for UK charities seeking ethical screening.
The group decided to launch the fund in response to demand from charity clients. It has opted for an FSA-regulated unit trust structure, which is restricted to charity investors in order to offer all of the appropriate tax exemptions.
The fund is being launched on 17 May and will be managed by Gemma Woodward alongside the firm’s charities team, which will use Newton’s global thematic investment process which already takes environmental, social and governance matters into account.
Woodward will adopt a dynamic asset allocation process and will hold between 30% and 60% in UK equities, 15% to 40% in overseas equities, between 10% and 40% in UK fixed interest and up to 20% in overseas bonds. She can also invest up to 10% in property and 5% in other funds. She aims to achieve a yield of 3% to 3.5% a year through the global balanced approach. Minimum investment in the fund is £5,000 with an initial charge of 1%.
The unitised offering will give smaller charities that do not necessarily have a dedicated investment adviser access to a diversified income-producing vehicle with an ethical overlay.
Ruth Murray, a director of charity business development at Newton, which manages £3.6 billion in charity assets, said the approach replicates the negative and positive screening the team already uses for segregated mandates with SRI or ethical objectives. For example, the team will not invest in companies which manufacturing products such as tobacco, alcohol and weapons, but will include businesses with good records in areas such as governance, the environment and human rights.
She said: ‘The fund suits charities of any size. From an investment point of view, how do smaller charities achieve diversification?’
Murray said recent research dispels what she sees as a myth that SRI and ethical investment can lead to lower returns. ‘We know from managing segregated portfolios that charities should not expect lower returns on their money. Our own work managing charity portfolios with ethical screening shows there can be short-term variation but over the long term we do not detect any downturn,’ she said.
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by Danielle Levy on Dec 12, 2013 at 09:03