Celebrating five years of Charles Stanley’s Responsible Models

According to our most recent survey 39% of underlying clients surveyed expect to increase the amount they invest in SRI/ESG investments in the next two to five years. With our long-term track record of managing Responsible Model Portfolios, we are well positioned to help advisers provide a solution for this increased appetite.

To help you meet the widest possible range of client needs, we offer four globally unconstrained, multi-asset models combining our strong asset allocation focus with a responsible investing approach.

We believe the most significant source of returns comes from your asset allocation, so that’s where we centre our focus. In-house, we generate a Strategic Asset Allocation to determine a long-term optimal portfolio for each risk level. Shorter term, we leverage the strong investment pedigree within Charles Stanley to dynamically adjust the portfolios to add value. Clients get the benefit of a truly global perspective and access to a range of asset classes, resulting in a highly diversified portfolio.

Through this rigorous active management and implementing our views using mainly low-cost passive ETFs, we offer a versatile range of MSCI ESG AAA-rated portfolios centred around our core beliefs:

1. Responsible investing does not necessarily mean giving up returns: ‘Is there a direct trade-off between returns and investing responsibly?’ We hear that question a lot. Indeed, when ethical values are overlayed to exclude certain companies or whole sectors, your investment universe will shrink. However, by taking ESG factors and the associated risks and opportunities into account, we believe that you can implement a responsible investing strategy, without compromising the potential for long term returns.
2. A responsible investing approach can be passive and active: In recent years, there has been strong momentum in the ESG universe which has led to the expansion of options in both active and passive collectives. There are some asset classes, where the passive coverage is underdeveloped but active vehicles are available. Our approach is to use predominantly passive vehicles to carry out our active asset allocation approach, which helps keep underlying costs low.
3. Responsible investing is more than just a score: While we do not impose a specific Charles Stanley overlay, the Responsible models will offer enhanced ESG characteristics compared to our other models. We will invest in thematic investments exposed to sustainable trends, including the evolving food industry or renewable power generation. The vehicle selection reduces portfolio exposure to areas that are considered harmful or controversial. This may include the tobacco or carbon intensive industries. We also may incorporate investments that seek to have a direct positive impact, such as via social bonds.

We’ve seen how ESG issues can have a material impact on shareholder returns and the wider economy and are passionate about providing our adviser partners with robust management to ensure you don’t miss out on future opportunities or are exposed to unnecessary risks.

For more information about our range of responsible models, please visit https://www.charles-stanley.co.uk/financial-advisers/managed-portfolio-services/responsible or call 020 4502 7218

Source: Charles Stanley Book of Stories 3.0.

The value of investments can fall as well as rise. Investors may get back less than invested. Past performance is not a reliable guide to the future. Charles Stanley & Co. Limited is authorised and regulated by the Financial Conduct Authority.