“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.

The portfolio looks to deliver above inflation returns (capital growth) through a combination of fixed interest, equity, and alternative investments with a responsible investment mandate.

Responsible investing is an umbrella term covering different routes to investing; we see it as doing good and believe there are three main ways to achieving this – ethical, sustainable / responsible and impact. More details can be found 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

All the Portfolios are tested on and carry both the Morningstar 5 Globe Rating and Low Carbon Designation.

A 5 Globe Rating indicates the portfolio is at the top end of its peer group in terms of sustainability, and takes matters of environment, society, and governance seriously.

A Morningstar Low Carbon Designation is assigned to portfolios which have low carbon-risk scores and low levels of fossil-fuel exposure.

Where do we invest?

To bring this to life below are four example holdings.

ASI Europe ex UK Ethical Equity Fund (Ethical)

Aim

The principal outcome for the strategy is to deliver investor-led sustainability. The strategy excludes those sectors that investors are concerned about and prioritises those with the right processes and solutions. Investors have a voice in the criteria managers employ to create the investable universe.

Transitioning

They do invest in companies that are transitioning to positive change, but they must be within the guidelines set by the investors in the Ethical Approach Document. This document lays out the negative exclusions as well as the positive inclusions.

Sample holdings

ASML Holding, Enel SpA, Schneider Electric SE, Antin Infrastructure Partners, Orsted A/S

Carmignac Emerging Markets Fund (Sustainable)

Aim

The strategy aims to enable positive change in emerging market countries by contributing directly or indirectly to improve living standards in these countries with their investments. It involves delivering the best returns possible while having a positive impact on society and the environment. The strategy uses a combination of negative screening and exclusion policies as well as ESG integration and positive screening. They also favour companies with a low carbon approach.

Transitioning

Yes, they are looking at trajectory and efforts undertaken by companies rather than having a static approach that consists of looking at a company/its ESG scoring at a given time. Therefore, transitioning companies are key, as by making efforts and changing the way they operate, they have more potential impact in driving positive change.

Sample holdings

Samsung Electronics, TSMC, Haier Smart Home Co Ltd, Grupo Financiero Banorte SAB de CV, New Oriental Education & Technology Group Inc ADR

Regnan Global Equity Impact Solutions Fund (Impact)

Aim

The strategy is a solutions-first strategy, focused on investing in mission-driven businesses that address underserved environmental and social challenges and deliver real, systematic change for the better.

Transitioning

Yes, the strategy will invest in transformational companies undergoing a significant shift in their business model or operations towards one that is focused on the delivery of a solution as identified using their proprietary systems.

Sample holdings

Evoqua Water Technologies, Agilent Technologies, Qiagen NV, Alfen NV, PTC Inc

Civitas Investment Trust (Thematic Impact)

Aim

The strategy is a leading Real Estate Investment Trust (REIT) dedicated to investing in the social housing and healthcare sectors in the UK. They have a dual objective of achieving both positive financial returns and large scale measurable social impact.

Transitioning

No

Sample holdings

High Acuity Facility Wales, Healthcare Facility Wales, St Thomas House Chester, Bedwardine Court Worcester, Lancaster Avenue London

Split by funds within the Portfolio (as at 1 July 2022)

Fund NamePercentage Holding
Fixed Interest
Rathbone Ethical Bond Fund5.00%KIID
Aegon Ethical Corporate Bond Fund5.00%KIID
Alternatives
Foresight Sustainable Real Estate Securities Fund5.00%KIID
The Renewables Infrastructure Group Limited5.00%Factsheet
Foresight Global Real Infrastructure Fund5.00%KIID
Civitas Social Housing Plc4.50%Factsheet
Home REIT4.50%Factsheet
Newton Sustainable Real Return Fund5.00%KIID
VT Gravis Clean Energy Income Fund5.00%KIID
Equity Exposure
Premier Ethical Fund5.00%KIID
Royal London Sustainable Leaders Fund3.00%KIID
ASI Europe ex UK Ethical Equity Fund4.00%KIID
Liontrust Sustainable Future European Growth Fund4.00%KIID
Legg Mason ClearBridge US Equity Sustainability Leaders Fund6.00%KIID
Sarasin Responsible Global Equity Fund4.00%KIID
Baillie Gifford Positive Change Fund4.00%KIID
Ninety-One Global Enviroment Fund4.00%KIID
Regnan Global Equity Impact Fund4.00%KIID
Montanaro Better World Fund4.00%KIID
Impax Enviromental Markets Trust4.00%Factsheet
Alquity Asia Fund5.00%KIID
Carmignac Emerging Markets Fund5.00%KIID

Portfolio Review

Quarterly Portfolio UpdateJuly 2022
Quarterly Market UpdateJuly 2022
Morningstar Quarter 2 2022 Portfolio Overview July 2022
Quarterly Portfolio UpdateApril 2022
Quarterly Market UpdateApril 2022
Morningstar Quarter 1 2022 Portfolio Overview April 2022
Quarterly Portfolio UpdateJanuary 2022
Quarterly Market UpdateJanuary 2022
Morningstar Quarter 4 2021 Portfolio OverviewJanuary 2022
Quarterly Portfolio UpdateOctober 2021
Quarterly Market UpdateOctober 2021
Morningstar Quarter 3 2021 Portfolio OverviewOctober 2021

Risk and benchmark performance of Portfolio

The Portfolio holds a higher content of equities compared to the Cautious Portfolio, but less than the Adventurous Portfolio. Currently the Portfolio holds approximately 15% 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. Example holdings include Unilever, AstraZeneca, HSBC Holdings, Diageo, and GlaxoSmithKline. This is an evolving area, and we believe this to be the closest match.

Performance

The Portfolio was launched on the 31 July 2014 and the total return up to 30 June 2022 is 87.64% against a benchmark return of 37.86%. A detailed breakdown of the performance is shown below.

Standardised Performance

1 Yr to 30/06/181 Yr to 30/06/191 Yr to 30/06/201 Yr to 30/06/211 Yr to 30/06/22
Balanced Positive Impact Portfolio8.17%6.65%6.90%21.15%-10.86%
Benchmark7.27%4.33%-13.35%18.78%2.15%

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

2016201720182019202020212022
Balanced Positive Impact Portfolio15.51%15.73%-5.30%22.35%12.92%11.12%-14.74%
Benchmark13.17%10.52%-7.46%18.97%-10.68%16.24%-3.26%

Performance from 31 July 2014 – 30 June 2022. 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.

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.