Heartwood IM ethical offerings aim to satisfy risk appetites
Heartwood Investment Management has launched a duo of ethically invested multi-asset strategies catering for different risk appetites among investors.
The Ethical Balanced portfolio has been designed for investors with a medium tolerance to risk and aims to outperform the CPI index by three per cent over the long term.
The Ethical Growth is for investors with a higher attitude to risk and targets CPI plus four per cent over the long term.
The investment vehicles incorporate negative screening to avoid exposure to activities deemed socially harmful. To this end, the firm said it specifically seeks to exclude businesses that derive significant profit from tobacco, alcohol, gambling, adult entertainment and defence and weapons.
The firm also incorporates positive screening to ensure the portfolios invest in companies that are of clear social or environmental benefit and display good governance in terms of business ethics and treatment of employees.
The funds will be managed by Benjamin Matthews with the support of the fund house’s investment team.
Heartwood recently appointed Paul Rose to the role of intermediary client director. Mr Rose, who joined from Novia Financial where he served as regional sales manager, is tasked with the development and management of the firm’s financial adviser business solution and distribution strategy.
Provider view
Noland Carter, head of Heartwood Investment Management, said: “Clients across the board are increasingly looking to have portfolios managed in a way that is aligned with their values and ethical concerns. With these globally diversified ethical strategies, clients will benefit from Heartwood’s expertise in building and managing multi asset portfolios, but will also be able ensure their investments have a positive social impact. We believe this approach is attractive to a wide range of private investors, charities, trusts and institutions.”
Matt Hollier, head of investment product, added: “Heartwood has wanted to offer ethical investment options to our clients for a significant period and have conducted substantial research in this area. Our belief is that we are now at a point where there is a sufficient range of high quality ethical investment instruments such that we can build high quality global multi-asset portfolios that can deliver appropriate returns to our clients.”
Adviser view
Philip Stevenson, chartered and certified financial planner at ARK Financial Planning, based in Cheshire, said: “In my 15 years as a financial adviser, I have never had a client who said they only wanted to be invested in an ethical fund. I am not sure how big the market for these types of funds is but I would not say that it is very big, going by my own experience.
“I do not think that investors are taking more risk in the current low yield environment. However, the idea of investors taking on less risk as they approach retirement remains true. Given the amount of volatility in global markets, I would say that some investors have taken less risk.”
He added: “The annual management charge does sound quite steep but then again, these types of funds tend to carry a premium.”
Charges: AMC of 1 per cent for clients who invest via an intermediary.
Verdict: Ethical investments face significant headwinds in the low yield and increasingly volatile investment environment. When it comes to the cost of ethical fund, 1 per cent is not too expensive however; they cost significantly more than some of the more conventional equity portfolio in market.
