RESPONSIBLE INVESTING SHOULDN’T COST THE EARTH
The AJ Bell Responsible MPS – transparent, low-cost portfolios, for clients who care about people and the planet, but still aim to make a profit.
Market trends indicate an increasing focus on responsible investment, with assets under management in the category more than doubling since January 2019. It is likely, therefore, that more and more of your clients will be looking for a way to ensure their principles are being taken into account when devising a suitable investment strategy.
To help you meet their needs, AJ Bell Investments has created six Responsible portfolios, offering varying degrees of risk for clients who want to achieve long-term capital growth through ethical investing.
As demand in the advised market for ESG investing grows, so too does the amount of regulation focused on the category. This puts advisers under even more pressure to actively assess their clients’ ESG preferences and select suitable products accordingly.
- The AJ Bell Responsible MPS helps you to stay ahead of such shifts in regulation by offering clients a low-cost, multi-asset, outcome-orientated responsible portfolio. This latest offering complements the existing range of passive, active and ‘Pactive’ investment products available from AJ Bell Investcentre, meaning you can present a complete Centralised Investment Proposition via our platform. This allows you to easily cater for any client’s requirements – whatever their objective or appetite for risk.
- As with our existing MPS range, the Responsible portfolios are rebalanced quarterly, and use passive investments to keep costs low. With an investment management fee of just 0.15% p.a. with no VAT, the range compares very favourably to the more typical 0.25%+ fee charged by other providers in this market segment.
How are the portfolios ‘responsible’?
Wherever possible, we invest in ETFs that track an MSCI SRI index, which effectively excludes controversial industries like weapons, tobacco and genetically-modified organisms, and ensures that we only invest in companies with high Environmental, Social and Governance (ESG) rankings.
When a client invests in a Responsible MPS rather than a ‘standard’ portfolio, they can be confident that they are contributing to a significant reduction in carbon emissions, and are avoiding controversial business areas that may harm society and the environment. Metrics to illustrate the scale of these positive contributions will be available in due course.
How is the Responsible MPS built?
Using the same high-level asset allocation strategy as our existing MPS ranges, the six Responsible portfolios sit on a spectrum that stretches from ‘Cautious’ to ‘Global Growth’, making them easy to map across from the standard MPS portfolios.
All of the portfolios in the range are implemented primarily using ETFs, and each has a 25% allocation to the VT AJ Bell Responsible Growth fund. This approach gives us the flexibility to make tactical allocation changes within the fund, rather than the rest of the portfolio – thereby minimising your clients’ potential Capital Gains Tax liabilities (where appropriate). It also helps to simplify the implementation process by minimising the number of holdings required.
We insist on complete transparency, so as well as mapping to all the leading risk-profiler tools, we also provide regularly updated factsheets, along with frequent updates on how the money is invested. Visit our Managed Portfolio Service page for more information, or contact your local Business Development Consultant, who is available to talk through any questions you may have.
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