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Evelyn makes value switch in ESG portfolios

A persistent problem for many allocators has been the need to diversify across investment styles within a sustainable portfolio.

The evolution of ESG investing has so far meant a lot of companies, and therefore funds, are overweight growth.

But Genevra Banszky von Ambroz, manager of Evelyn's sustainable MPS range, believes she has no problem finding value ESG funds.

She has reduced cash exposure in all of the portfolios except the highest risk model, where cash levels are already at very low levels.

The cash is instead being deployed into short-dated bonds, an asset class that ought to offer more inflation protection.

The new investment made in this area is the Aegon Global Short Dated Climate Transition fund (previously called Aegon Short Dated Investment Grade Bond), while some of the holding in the TwentyFour Short Term Bond Income fund has been sold. 

That Aegon fund is just over £400m in size and has lost 2.5 per cent over the past year. It is held in the ESG portfolios of four of the allocators on our database.

On the equity side of the book, a new investment was made in the Jupiter Responsible Income fund, at the expense of the Trojan Ethical Income fund, which was reduced. 

Another of the reasons cited for reducing this fund is the correlation between it and the Trojan Ethical fund, which is already held within the alternatives allocation in the Evelyn MPS. 

The Trojan Ethical fund is the more popular of the two among the allocators on our database, being held by four DFMs, compared with two who hold the Ethical Income fund from the same house. The Ethical fund is also more than twice the size of the income fund, with assets of over £700mn. 

That Trojan Income fund fits firmly within the growth category, while the Jupiter fund, which is held by one other allocator on our database, is firmly in the value camp.

The other addition made this time is Schroder Global Sustainable Value.

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