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Fund EcoMarket

the sustainable, responsible and ethical investment information hub

Sustainable, responsible and ethical funds explained

SRI Styles Directory

The Fund EcoMarket ‘SRI Styles’ segmentation system is designed to help you find your way around funds in the sustainable, responsible and ethical universe more easily. We group funds according to what they are designed to do –  from an ‘ethical or SRI’ perspective, focusing on what it is that they consider.

In short, SRI Styles group ‘ethically similar’ options together.

The aim of this is to help users to recognise the key similarities and differences that exist across this market, so that individual investor’s aims can be met more easily.

SRI Styles work on the basis that it is best to keep things simple – and to avoid industry jargon as far as possible… however they are only a starting point.  For investors looking for specific issues or a precise approach on Fund EcoMarket, you can (and should) use the additional filter options, text and links provided.

 Directory and links to individual ‘Styles’ pages

Funds which focus on ‘thematic’ strategies, often alongside screening strategies:

  • Sustainability Themed funds focus significantly on (environmental and social) sustainability  issues, opportunities and themes – building fund strategies accordingly.  These funds can be expected to have a forward looking focus with a significant emphasis on companies that show ‘sustainability leadership’, are ‘facilitating transition’ and/or are widely regarded as ‘solutions companies’. They may also have extensive ‘ethical’ exclusion criteria which help to clarify where they will not invest. ‘What a company does’ is important to these fund managers (alongside ‘how it operates’) and although they are invested in companies with high standards, the managers may also work to encourage higher standards through stewardship activity where necessary.
  • Sustainability Tilted funds integrate (environmental and social) sustainability considerations into their investment processes in order to help make better investment decisions but investments are not driven by sustainability themes.  These funds may invest in most company types and may be ‘overweight’ in companies with higher standards and ‘underweight’ (invest less in) companies with poor practices – rather than necessarily excluding them. They may or may not have ethical exclusions.  They may work to encourage more sustainable business practices through stewardship activity – and can be well placed to help encourage progress because of where they invest. (NEW Classification – under development.)
  • Environmental Themed funds significantly integrate environmental issues into their investment strategies, sometimes alongside ethical avoidance criteria.   Their focus is often around longer term environmental and resource related issues. Strategies vary.  Some funds focus on a single issue, industry or resource.
  • Social Themed funds focus on ‘people issues’, addressing social challenges such as employment, education, housing and other basic necessities of life. Strategies vary.

Funds which focus on ‘ethical/values based’ negative and/or positive screening based strategies:

  • Ethical – Balanced funds have a (values based) ethical focus but also normally consider ESG (environmental, social and governance) issues.  Fund exclusions are balanced with positive stock selection to offer a ‘balanced’ approach.  Strategies vary. Many have ‘best in sector’ strategies – which means they may invest in a range of sectors.
  • EthicalNegative  funds have often extensive ethical exclusion criteria (most commonly armaments and tobacco, but often many other issues also).  These normally include environmental, social and governance related exclusions also.   Strategies vary.  Some funds exclude more than others.
  • Faith Based funds invest in line with specific religious principles (e.g. Shariah Law)
  • ‘Limited Exclusions’ is effectively a sub style of Negative Ethical.  These are funds that only apply minimal negative exclusion criteria. This may lead them to invest in most (or almost all) areas and company types. They may reference norms or sectors – e.g. only avoid tobacco, or only avoid companies with significant UN Global Compact related controversies.

Strategies that may apply to an individual fund or across all fund manager assets:

  • ESG Plus  Funds combine ESG risk mitigation strategies alongside extensive responsible ownership activity and/or exclusion criteria. Strategies vary. See fund entries for further information. This classification may be applied to individual funds or entire asset management companies.
  • Responsible Ownership entries on Fund EcoMarket refer to company wide strategies – listing individual fund management companies by name. For information on ‘responsible ownership’ (Stewardship/voting/engagement) activity that applies to individual funds see the ‘Corporate Activity’ filter area within each fund entry. This strategy often forms a significant part of SRI screened and themed fund strategies as many work to encourage higher standards.

Additional SRI Styles classifications

The following are used for a small number of funds with the aim of reducing the risk of misleading users.  These are not reflected in our  StyleFinder fact find tool – the aim of which is to simplify the advice process.

  • ‘Other’ is used to flag funds that have a policy or strategy that is aligned to the issues covered by sustainable and/or ethical funds but is substantially different from other funds (e.g. single/niche issue).
  • ‘Unclassified’ funds are those we have not been able to classify (typically because information is insufficient).
  • ‘Pending’ indicates funds not yet classified.

Fund Strategies vary, sometimes significantly.  Please see individual fund entries for fund specific information.

Fund EcoMarket listings

The Fund EcoMarket database lists all of the regulated, retail, onshore funds (plus a few related entries) that we are aware of.  The listing is therefore (as far as we are aware) ‘whole of market’ for these groups.  A listing on this database does not represent any form of endorsement or indication of quality.

Two of our SRI Styles are not whole of market as they are by mutual agreement only (they are shown as we hope they will be of interest to site users).  These are the  ‘Responsible Ownership’ Fund Management Company listings and the  ‘DFM/Portfolio Planning’ list.

Fund EcoMarket does not list specialist options such as unlisted funds or individual share or bond issues.

Please contact us if you have found any omissions or would like to request we alter any of the information we hold.

Go to adviser download page   to see the ‘Big 3’ download for the above graphic  which plots core client aims against typical fund manager strategies within each of our SRI Styles.)

Within each style there are significant differences in strategy.  There are also areas of cross over between the styles.  Our aim is for the Styles to highlight the core issues funds consider (these are explained further in the ‘Policies, Issues and Themes’ filter option. To understand how fund managers deal with the issues, please use the ‘Approaches and Application’ filter.  Please read fund manager supplied text and links in the ‘More Info’ area for further information.

 

This service is provided for information purposes only.  Please speak with a qualified financial adviser for further information.

We do not deal directly with investors and are not authorised to offer advice.

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