“The world is reaching the tipping point beyond which climate change may become irreversible. If this happens, we risk denying present and future generations the right to a healthy and sustainable planet – the whole of humanity stands to lose.”
Kofi Annan, Former Secretary-General of UN
Aim of Portfolio
This is our flagship Positive Impact Portfolio launched in 2014.
| Aim | Benchmark | Time frame | Risk / volatility | Exclusions | Capital at risk | |
| Balanced 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 best suited for those investors seeking slightly more risk and at the same time wanting an exclusionary strategy. It looks to deliver a balance between defensive assets, and traditional UK and international assets. Currently the portfolio has 60% in UK and International Assets whereas the Cautious Positive Impact Portfolio has 43%. | Yes | Yes |
For more information click here
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 Balanced Positive Impact Portfolio.
More details on our approach can be found here
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)
Portfolio Review
Performance
The Portfolio was launched on 1 August 2014. The chart shows the total return up to 30 June 2023.
| Total Return Since Launch | Annualised Return Since Launch | |
| Balanced Positive Impact Portfolio | 81.43% | 6.91% p.a. |
| LWM Benchmark | 52.20% | 4.82% p.a. |
| 2019 | 2020 | 2021 | 2022 | 2023 | Since Launch | |
| Balanced Positive Impact Portfolio | 22.33% | 12.80% | 11.09% | -17.60% | 0.78% | 6.91% p.a. |
| LWM Benchmark | 18.97% | -10.68% | 16.24% | 1.15% | 3.91% | 4.82% p.a. |
| 1 Year to 30/06/19 | 1 Year to 30/06/20 | 1 Year to 30/06/21 | 1 Year to 30/06/22 | 1 Year to 30/06/23 | |
| Balanced Positive Impact Portfolio | 5.87% | 6.65% | 21.12% | -10.90% | 2.66% |
| LWM Benchmark | 2.88% | -13.35% | 18.78% | 2.15% | 8.87% |
Volatility
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.
Important notes
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:
| Return | |
| 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% |
| Benchmark | 9.82% | – | 9.34% |
| Balanced Positive Impact Portfolio | -0.61% | 2.46% | 6.49% |
| Benchmark | 9.82% | 3.39% | 4.65% |
| Adventurous Positive Impact Portfolio | 0.72% | – | 2.43% |
| Benchmark | 9.82% | – | 9.34% |
How do we measure performance?
Portfolio Level
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.
Fund Level
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.
Charges
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.
| Fund fees | |
| Cautious Portfolio | 0.74% |
| Balanced Portfolio | 0.80% |
| Moderately Adventurous Portfolio | 0.89% |
| Adventurous Portfolio | 0.90% |
| Cautious Positive Impact Portfolio | 0.94% |
| Balanced Positive Impact Portfolio | 0.91% |
| Adventurous Positive Impact Portfolio | 0.91% |
| Income Portfolio | 0.99% |
| 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.
Performance
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.
Factsheets
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.