Our Ethical Investment Portfolios.
Ethical Investment Funds Management (EIFM) manage diversified portfolios designed to provide investors with access to ethical investments which are actively making a positive contribution to a sustainable future. James Baird from JustInvest is on the EIFM Investment Committee. For more information, please visit our Ethical Investment Funds Management website.
The core ethical portfolios are ‘Growth’ and ‘Fixed Income’ portfolios, which allow us to combine both to cater for a range of different risk profiles. Both portfolios can easily be compared against their relevant benchmarks (details available on request).
We also offer two Australian Share portfolios – an actively managed ‘Australian Equities‘ portfolio, and an optimised passive ‘Large Cap’ only Australian Equity portfolio. These portfolios are designed to give investors a low cost solution with robust investment processes.
Our process involves negative screens that filter out activities that are undesirable from an Environmental, Social and Governance (ESG) perspective, positive screens that favour sustainable business practices, and a size, sector and valuation overlay. Our Investment Committee includes External Consultants Mark Forstmann (Investment Analyst) and David Bassanese (Economist).
Separately Managed accounts
Separately Managed Accounts (SMA’s) are share portfolios which allow you to have the benefit of a portfolio of direct shares, ETF’s and managed funds packaged like a single managed fund, which allows you to have a less active approach than managing individual shares. Instead of buying units in a managed fund, when you purchase a SMA you are actually purchasing each individual investment. This gives you more transparency over the assets you own, as well as more control over capital gains tax and switching investments. You are the beneficial owner of the underlying securities and that means you receive the dividends and franking credits from the underlying shares.
A key benefit of a SMA investment is that unlike a managed fund, you are not invested in ‘common’ units, but rather the underlying shares are recognised as held for your account. This means if assets are sold, you will pay tax on your share of the profits from the date you joined the portfolio, not from the date the portfolio started, nor for realisations for other investors. This means you will not ‘inherit’ capital gains from previous events, or other investors’ actions.
When you invest in SMA’s via an administration platform, this allows you to have a ‘single view’ of your Australian share holdings via your statement or your online account. This gives you instant access to reporting and allows you to determine your overall portfolio returns, and easily compare to relevant benchmarks.
Negative Screening
Applying a negative screen to all the shares listed on the ASX to remove from consideration all the companies that have unwanted direct or indirect industry exposures
Positive Screening
Applying a positive screen to rank the remaining companies in order of the Environmental, Social and Governance (ESG) scores
Our Process.
JustInvest and Ethical Investment Advisers developed these ethical share portfolios for our clients to access in their Superannuation (including SMSF’s), Pension and Investment accounts. Our investment process includes:
Negative Screens
No direct or indirect exposure to:
- Fossil Fuels
- Uranium
- Defence Industries
No direct exposure to:
- Other extractive Industries
- Gaming
- Alcohol
- Tobacco
Positive Screens
The portfolio is designed to hold fundamentally high quality companies, with a bias against the most expensive (overvalued) stocks in the market, after screening for ESG factors. The bias towards companies with high ESG ratings is created utilising rankings from research houses Sustainalytics, ETHOS and ISS Governance.
A key focus of the portfolio is to find companies which are involved in positive environmental activities or which provide benefits to society, such as healthcare, renewable energy, energy efficiency and technology, food, water, sustainable agriculture, education, community development and social welfare. We then construct the portfolio with an overlay of a forward looking valuation assessment, a size and sector bias, and back testing.
Note: These portfolios are only recommended to clients in conjunction with our financial advice process. This involves detailed consideration of your financial objectives and considers your risk profile, ethical criteria and other factors relevant to your individual situation. Past performance is not an indicator of future performance.