“Real success can only come if there is a change in our societies and in our economics and in our politics.”

Sir David Attenborough

The history

This Portfolio was originally called the Ethical Portfolio and launched in 2014; we renamed it the Positive Impact Portfolio in 2020. At the heart of the portfolio is the desire to find investments that protect the world’s resources for future generations and support a sustainable economy. If investors can use their money for good, without compromising their goals and returns we believe this is a compelling story.

About the Portfolio

The name, Positive Impact Portfolio, reflects the positive nature of what the portfolio is aiming to achieve, without sacrificing returns.

To achieve its aims, the portfolio invests in Ethical, Impact, ESG (Environmental, social and corporate governance) and Sustainable Funds, and Investment Trusts.

Ethical tends to be negative screening i.e. you can’t invest in certain things, whereas sustainable is positive. Within sustainable, ESG and Impact assets some managers will include investments which are transitioning from old world models to new.

The portfolio will behave differently from the others due to the mix of holdings which includes renewable energy, social housing etc, which don’t tend to respond in the same way as equity markets.

Carbon Footprint

Using data from yourSRI.com and MSCI, the chart below demonstrates how the portfolio stands against the MSCI ACWI Low Carbon Leaders, MSCI Carbon Target and MSCI ACWI Index.

Portfolio Score

Using data from yourSRI.com the Portfolio is compliant with the ten principles of the UN Global Compact. This covers ten principles within human rights, labour, environment and anti-corruption. More details can be found clicking here

The chart below shows the portfolio ESG Rating Distribution with an overall rating of A. 34.3% of the portfolio has exposure to ESG Leaders. This is an evolving market and not all investments are currently rated.

Where do we invest?

There are some great stories within the portfolio, including:

Civitas Social Housing, which is the first real estate investment trust dedicated to investing into social housing and healthcare facilities.

The Renewables Infrastructure Trust invests in energy sources (wind, solar) that contribute towards a zero-carbon world.

Impax Environmental Markets, which invests in companies which have at least 50% of underlying revenue generated by sales of environmental products or services in energy efficiency, renewable energy, waste and sustainable food and agriculture markets.

The fund also holds bonds, including the Rathbone Ethical Bond Fund. Some examples of its holdings include Chelmer Housing Partnership, Charities Aid Foundation, Places for People and Dolphin for Living. Even in a world of squeezing incomes this fund is generating a yield of 3.5% p.a.

The portfolio also invests across Europe, UK, US, Emerging Markets and Asia as we seek fund managers who actively engage globally with companies to make positive change.

Aim of Portfolio

The Portfolio looks to invest with an ethical, impact, ESG and sustainable mandate which doesn’t impact on long term performance. It will achieve this by investing in a combination of fixed interest, specialist and equity investments.

Portfolio Review

Quarterly Portfolio UpdateOctober 2020
Quarterly Market UpdateOctober 2020
Morningstar Quarter 3 2020 Portfolio Overview October 2020
Quarterly Portfolio UpdateJuly 2020
Quarterly Market UpdateJuly 2020
Morningstar Quarter 2 2020 Portfolio OverviewJuly 2020
Quarterly Investment Committee Executive SummaryJuly 2020
Quarterly Portfolio UpdateApril 2020
Morningstar Quarter 1 2020 Portfolio OverviewApril 2020
Quarterly Investment Committee Executive SummaryApril 2020
Quarterly Portfolio UpdateJanuary 2020
Quarterly Market UpdateJanuary 2020
Morningstar Quarter 4 2019 Portfolio OverviewJanuary 2020

Risk and benchmark performance of Portfolio

The Portfolio holds a higher content of equities compared to the Cautious Portfolios, but less than the Adventurous Portfolios (we currently do not offer ethical versions of these portfolios). Currently the Portfolio holds approximately 20% in assets such as fixed interest and absolute return funds, with the rest in equity funds which can include property. We believe this is the best way to provide potential upside growth as well as providing equal weight between risk and reward.

For more information click here

What is the benchmark

We use the Royal London UK FTSE4Good Tracker Trust. The FTSE4Good Index is a series of ethical investment stock market indices launched in 2001 by the FTSE Group. The index excludes companies due to their involvement in tobacco production, nuclear weapons, conventional weapon systems, or coal power industry and rates companies for inclusion based environmental sustainability, relationships with stakeholders, attitudes to human rights, supply chain labour standards and the countering of bribery. This is an evolving area and we believe this to be the closest match; we have used this since the launch of the portfolio.

Performance

The Portfolio was launched on the 31 July 2014 and the total return up to 30 September 2020 is 83.38% against a benchmark return of 9.96%. A detailed breakdown of the performance is shown below.

Standardised Performance

1 Yr to 30/09/161 Yr to 30/09/171 Yr to 30/09/181 Yr to 30/09/191 Yr to 30/09/20
Positive Impact Portfolio20.05%14.63%8.18%5.30%10.30%
Benchmark12.92%10.74%4.87%5.30%-17.15%

12 Months Total Return (bid to bid) Source: Morningstar, net income reinvested.

20162017201820192020
Positive Impact Portfolio15.44%15.73%-5.30%22.35%4.51%
Benchmark13.17%10.52%-7.46%18.97%-19.89%

Performance from 31 July 2014 – 30 September 2020. Performance for 2014 is from 31 July 2014. 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.

Split by funds within the Portfolio

Fund NamePercentage Holding
Fixed Interest / Absolute Return20%
Rathbone Ethical Bond Fund10%KIID
Kames Ethical Corporate Bond Fund5%KIID
Newton Sustainable Real Return Fund5%KIID
UK Equities8%
Kames Ethical Equity Fund4%KIID
Royal London Sustainable Leaders Fund4%KIID
European Equities8%
ASI Europe ex UK Ethical Equity Fund4%KIID
Liontrust Sustainable Future European Growth Fund4%KIID
US Equities8%
Legg Mason ClearBridge US Equity Sustainability Leaders Fund8%KIID
Global Equities45%
BMO Responsible Global Equity Fund5%KIID
Sarasin Responsible Global Equity Fund5%KIID
Royal London Sustainable World Trust5%KIID
Baillie Gifford Positive Change Fund5%KIID
VT Gravis Clean Energy Income Fund5%KIID
Sun Portfolio Climate Assets Fund5%KIID
Impax Environmental Markets Trust Plc5%Factsheet
The Renewables Infrastructure Group Limited5%Factsheet
Civitas Social Housing Plc5%Factsheet
Asia and Emerging Markets11%
Vontobel Fund – mtx Sustainable Emerging Markets Leaders6%KIID
Stewart Investors Asia Pacific Sustainability Fund5%KIID

Important notes

Performance

The performance for the portfolio is based on the previous holdings for the portfolio. Data for performance is sourced from Morningstar. These figures are provided to give an indication of the performance of the Portfolio. The performance figures take into account all fund / asset charges but do not reflect any additional charges, for example the cost of the investment plan and fees paid to LWM. These expenses may reduce the actual figures shown.

As an example of how this will impact on the performance, assuming the total gross cost of the Portfolio is 0.79% p.a. (this is reflected in the performance figures shown), then after rebates and reflecting any fees payable to LWM Consultants the actual cost of this portfolio could be 2.19% p.a. (on a fund of £100,000 this would be £2,190 p.a.). This means that the drag on performance is around 1.40% p.a. (on £100,000 this is around £1,400 p.a.). The cost of accessing the funds may be higher via other routes and will include additional fees, the estimate is based on the highest charge via a SIPP and for other investments the charge will be lower. Charges may also reduce depending on the size of the assets held.

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.