7IM cuts fees on ESG fund

7IM cuts fees on ESG fund
Credit: Jason Alden/Bloomberg

Seven Investment Management has reduced the cost of its Sustainable Balance fund in a bid to appeal to more investors.

The fund house announced today (October 2) it has cut the fee from 1 per cent to 0.75 per cent as it sought to “broaden the appeal of its proposition for investors interested in responsible investments”.

Launched in 2007, the £140m fund adopts a ‘rigorous’ sustainable screening process, looking to exclude companies with poor ethical practices and those from non-sustainable industries.

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It also looks to favour firms which score positively from an ethical standpoint.

It is in the top quartile of performers in the IA Mixed Investment 20-60 per cent Shares sector over a one year-, three year- and five year-period, returning 30 per cent compared to the sector’s 21 per cent since 2015.

Camilla Ritchie, senior investment manager at 7IM, said: “As firms focus ever more closely on implementing guidelines on green and responsible practices, and with the increasing awareness investors have of the impact their money can have on companies and the environment, sustainability is going to be a major trend affecting investment returns in the long term.  

“There is mounting evidence to suggest that stocks with high ESG scores are more resilient than those which score poorly. This goes part way to explaining why funds like the 7IM Sustainable Balance fund has delivered better returns than the industry average.”

ESG investing has boomed in popularity in recent years as fears over climate change have led investors to consider the impact of their money and as a growing number of millennials have begun investing.

Recent data from Morningstar showed global assets in sustainable funds hit £930bn in the third quarter of 2020, a record high, after investors pumped £62bn into such funds in the three months to September.

Verona Kenny, managing director of intermediary at 7IM, said investors were “more aware than ever” that how they invested had a role to play in providing a sustainable and responsible future.

She added: “We have seen an increase in demand from investors and advisers looking to place money into these kinds of funds, and we are delighted to be in a position to offer one of the longest running and top performing sustainable strategies to investors at this new, lower cost.” 


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