Friends Provident Stewardship fund crashes

Debt_Free_Chick

There's a nice piece of work looking at analysing past performance here (from Alliance Bernstein)

I really like the analogy with a coin-tossing championship in China on pages 4-5

bigbloke45

From Debt free chick;

"Incidentally - you don't see pension scheme trustees buying "ethical" funds "

Because this is not their mandate. If their mandate was to invest in "ethical" companies you would. But, as they are responsible to a broad "church" of scheme members, they cannot. You might be interested to see what the COE fund managers invest in!

Once again, I make the point; you can invest in a "conviction" fund or go for Top performance. It is not often that these two coincide.

Debt_Free_Chick

bigbloke45 wrote: »

From Debt free chick;

"Incidentally - you don't see pension scheme trustees buying "ethical" funds "

Because this is not their mandate. If their mandate was to invest in "ethical" companies you would. But, as they are responsible to a broad "church" of scheme members, they cannot

There is nothing to preclude them from including ethical funds in their portfolio - they have a very wide mandate which is only to invest for the benefit of the scheme beneficiaries. They do not need to reflect the views or preferences of the members. Cargill vs Scowan was the case for this

My point is that they have the option to - but they don't. And you have to ask yourself why not?

EdInvestor

The flagship of the Friends Prov stewardship is actually the F&C ( the fund management company half owned by FP) Stewardship income fund run by Ted Scott, a top fund manager of many years standing.

http://www.trustnet.com/ut/funds/?fund=5056

See companies owned.

This is basically an Equity Income fund which excludes a few EI choices such as fags, defence companies, most energy companies etc. Like the other EI funds, it is mainly invested in companies that pay good dividends such as financials (including banks) utilities, phone companies, retail, housebuilders.

The whole EI sector is badly down at present largely because of the banks which have been hit by the credit crunch, which has then spread to housebuilders and retailers. But some EI funds have been able to limit the damage by holding those companies which have not been hard hit ( cigs, oils, mining cos) and thus have suffered less damage.That option hasb;t been open to the ethical funds.

The OP might like to consider being patient. Once the credit crunch is over we can expect to see all these badly hit companies rebound as they are heavily oversold.Only mug punters sell out at the bottom.

bigbloke45

Debt_Free_Chick wrote: »

There is nothing to preclude them from including ethical funds in their portfolio - they have a very wide mandate which is only to invest for the benefit of the scheme beneficiaries. They do not need to reflect the views or preferences of the members. Cargill vs Scowan was the case for this

My point is that they have the option to - but they don't. And you have to ask yourself why not?

Sorry, DebtFreeChick, you seem to have got the argument "back to front" I don't have to ask myself "why not?", you have to ask yourself "why should they?" What you asking is the tired old question "Prove to me there is no God" when the question should be "Prove to me there is a God"

But let me ask you this, if you were a member of a defined contribution pension scheme and, at retirement, your pension was somewhat/severely reduced because your trustees had pursued a policy of investing in "ethical" stocks, would you say "thank you" because they had "done the right thing". If so, what about the majority of members who just wanted the trustees to act to create the largest pension fund for them at retirement?

Surely, if you have the strong conviction you should lobby the trustees to create a "sub-fund" for ethical investors to use (and I think you would struggle to achieve this) or go your own way and give up any employer contribution because you feel so strongly.

My point being that, if you feel so strongly about conviction funds, then you should have the strength to act and not just talk.

Who knows, your fund choices may just do better for you at retirement and, if they don't at least you had the satisfaction of knowing that your reduced pension has come about because of your strong convictions.

Ian_W

bigbloke45 wrote: »

My point being that, if you feel so strongly about conviction funds, then you should have the strength to act and not just talk.
Who knows, your fund choices may just do better for you at retirement and, if they don't at least you had the satisfaction of knowing that your reduced pension has come about because of your strong convictions.

Que?

What makes you think D_F_C was advocating ethical funds or suggesting pension fund trustees should invest in them. Was it this?

This is my own massively over-simplified take on ethical funds .....
They give themselves no chance to escape to a "safe-haven" of other stocks, because they're operating with one hand tied behind their back.
By "safe-haven", there's really been no such thing in the past 12 months or so, but often, certain sectors hold up better..
By its own admission, it invests in a concentrated market - there ain't a lot of stocks for them to choose from!

ten.sbih

Debt_Free_Chick wrote: »

Incidentally - you don't see pension scheme trustees buying "ethical" funds

Not true. The world's second largest pension fund (and largest in Europe) has a very very strict ethical mandate.

http://en.wikipedia.org/wiki/The_Government_Pension_Fund_of_Norway

Debt_Free_Chick

Well, I really only meant UK rather than worldwide.

And I don't mean Government/sovereign wealth funds - I mean privately run pension funds .... UK pension funds.