“Adults keep saying we owe it to the young people, to give them hope, but I don’t want your hope. I don’t want you to be hopeful. I want you to panic. I want you to feel the fear I feel every day. I want you to act. I want you to act as you would in a crisis. I want you to act as if the house is on fire, because it is.”Greta Thunberg, 17 year-old Swedish Activist
Aim of Portfolio
|Aim||Benchmark||Time frame||Risk / volatility||Exclusions||Capital at risk|
|Adventurous Positive Impact Portfolio||To deliver a return of between 6% and 8% gross over the long-term. This should, in a normalised environment, be above the higher rate of cash or inflation.||Royal London UK FTSE4 Good Index Fund||10-years plus||This is our highest risk exclusionary strategy. It is aimed for those clients looking for the greatest exposure to UK and international assets with minimal exposure to defensive assets. Currently 76% of the strategy is weighted towards UK and international assets.||Yes||Yes|
About the Portfolio
The name, Positive Impact Portfolio, reflects a desire to achieve positive outcomes for the environment and society without sacrificing returns.
To this end, we build the investments first; whether they fall into the ethical, sustainable or impact bucket is almost irrelevant. We take a blended approach to deliver the best outcomes and the chart below shows the current split between buckets in our Adventurous Positive Impact Portfolio.
Making a difference
We use analysis from BlackRock for the portfolio. The latest data is shown below based on the holdings as at 1 July 2023.
Split by funds within the Portfolio (as at 1 July 2023)
The Portfolio was launched on 1 July 2020. The chart shows the total return up to 30 June 2023.
|Total Return Since Launch||Annualised Return Since Launch|
|Adventurous Positive Impact Portfolio||10.74%||3.46% p.a.|
|LWM Benchmark||33.63%||10.15% p.a.|
|Adventurous Positive Impact Portfolio||12.93%||-16.40%||1.16%||3.46% p.a.|
|LWM Benchmark||16.24%||1.15%||3.91%||10.15% p.a.|
|1 Year 30/06/2021||1 Year to 30/06/22||1 Year to 30/06/23|
|Adventurous Positive Impact Portfolio||24.52%||-11.67%||0.50%|
Source: Morningstar, on a bid to bid basis with net income reinvested. You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as rise. The total return reflects performance without sales charges or the effects of taxation, but is adjusted to reflect all on-going fund expenses and assumes reinvestment of dividends and capital gains. If adjusted for sales charges and the effects of taxation, the performance quoted would be reduced.
What is the difference between the aim of the strategies and benchmark?
The target or aim is to deliver returns of 6% to 8% p.a. over ten years. This includes the fund charges but not our fees and platform charges.
How do we test these figures?
We follow the BlackRock Capital Market Assumptions https://www.blackrock.com/institutions/en-zz/insights/charts/capital-market-assumptions
These outline the long-term asset return expectations. The current return expectations for the portfolios are:
|Cautious Positive Impact Portfolio||7.01% p.a.|
|Balanced Positive Impact Portfolio||7.05% p.a.|
|Adventurous Positive Impact Portfolio||7.39% p.a.|
Would we review the expectations?
Yes, if the market expectations for returns reduced then we would reduce our long-term return profile. We review this quarterly and although the long-term expectations have come down, they are still within the 6% to 8% target.
Do we guarantee a return of 6% to 8% p.a. over a ten-year period?
This is our stated aim. We do not guarantee this.
Why do we have a benchmark?
The benchmark is a measure of performance.
We use the Royal London UK FTSE4 Good Index Fund as the benchmark across all the portfolios. Our fundamental aim is to deliver a return of between 6% and 8% p.a. over a ten-year period.
The FTSE4 Good Index can include some fossil fuels but is the closest match that we can use. Below is the methodology they use.
It does have exclusions:
We don’t have a ten-year track record on the main Positive Impact Portfolio, and the Cautious and Adventurous Portfolios were only launched in 2020. The table shows performance over 3-years, 5-years and since launch (for the Balanced version this was 1st August 2014).
|3-years (p.a.)||5-years (p.a.)||Since Launch (p.a.)|
|Cautious Positive Impact Portfolio||-1.52%||–||0.03%|
|Balanced Positive Impact Portfolio||-0.61%||2.46%||6.49%|
|Adventurous Positive Impact Portfolio||0.72%||–||2.43%|
How do we measure performance?
We have several touchpoints when monitoring performance:
- We monitor performance monthly.
- We have an internal monthly investment risk matrix. Within this we monitor the target return, and compare the performance to a range of discretionary managed portfolios.
- On a quarterly basis we update the website with performance data and provide updates.
- From September to February, we carry out a comprehensive review of the portfolios and rebalance on 1 July each year (subject to your approval).
The primary focus of this work is to understand periods of underperformance and adjust where we see appropriate.
As a minimum we look to review all the funds within the portfolios once a year. We write up the notes from these reviews and these are available on the website.
Although we consider longer term performance, we also look at short term performance to understand the reasons for any underperformance or sudden spike in performance. We may change the strategy where we feel that there is a long-term shift in the environment, where we feel the investment will no longer be appropriate, if there are better opportunities, or where there has been a significant change to the operation of the strategy.
The performance data includes the fund charges but not the platform and LWM fees. Fees are fully disclosed. Below are the fund fees as of 31 August provided by Trustnet.
|Moderately Adventurous Portfolio||0.89%|
|Cautious Positive Impact Portfolio||0.94%|
|Balanced Positive Impact Portfolio||0.91%|
|Adventurous Positive Impact Portfolio||0.91%|
|Positive Impact Income Portfolio||1.06%|
We review our charges within the Consumer Duty Fair Value Assessment. We also disclose under transparency on the website.
You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as rise. LWM only invests in UK based investments although some funds / assets may have overseas holdings, the performance of funds / assets where some holdings are denominated in foreign currencies will also be subject to variations in currency rates.
These factsheets are provided by third parties for information. LWM is not responsible for these factsheets, has not reviewed them, and accepts no liability in connection with your use of them or any of their content. These factsheets display the fund manager’s standard retail charges and please note that product charges and fees may replace the charges displayed.