Responsible Investment Fund Help Required

outlier

Hi all

I am fairly new to investing (< 2 years) and have been following the usual recommendations for beginners (i.e. invest in a passive, diversified fund). I am currently invested in Vanguard Lifestrategy 100% equities.

Lately, I have become more concerned about where my money goes and have been researching ethical / responsible investing. I was hoping I could have your opinions on a fund I'm thinking of investing in. It is the F&C Responsible Global Equity Fund. It seems to be performing just at well as VLS 100 but I am wondering if it is diverse enough and something I could invest in long term or if I would need to hold additional funds alongside it. Or are there other socially responsible funds I could consider? I don't think I have found any that seem as good as this one.

(On a side note, please could we not let this turn into a discussion on whether ethical investing is worthwhile as I have seen in some other threads - I already know that you could find something unethical about nearly every company in existance but there is nothing wrong with having boudaries imo...)

My other questions are, how much should I be holding in one fund? I currently have nearly 20k in VLS. How much more could I put in before it starts to get too risky?

Thanks in advance

firestone

Not sure with the make up of this fund and others that they are really that ethical as the term once implied.Within my pension choices there is the Royal London range of sustainable funds which used to be run by the Co-op and have done well but still contain many of the big name companies you would expect in a global fund.
There are investment trusts such as Impax environmental or Greencoat wind which are looking to invest in a green or positive way you could also look at funds/ETF using an ESG investing style

masonic

Information on this fund seems fairly limited (even on its own factsheet), but based on Morningstar, this fund seems to have a composition broadly in line with the world index in terms of allocation by geography and sector. It doesn't have Vanguard Lifestrategy's overweight to the UK, which isn't necessarily a bad thing. It could be held as a standalone investment for your equities. Most people would hold defensive assets alongside equities and those would need to be sought separately.

To really understand what risks you are taking holding a large sum with a single underlying fund provider, you'd need to look into the fund's domicile and the relevant compensation limit. Say it was £50k for example, which is the standard FSCS cover for UK investments, you'd be entitled to up to £50k compensation in the case of institutional fraud by the fund house. But in such cases it is unlikely the loss you would otherwise suffer would be 100% of capital - so you could potentially hold more than this and still be exposed to very little counterparty risk - any loss would be shared between all investors and the first £X would be covered by a compensation scheme - certainly this is less risk than the investment risk you take on by investing in the underlying companies. So I don't think there is a clear answer to that question.

dunstonh

(On a side note, please could we not let this turn into a discussion on whether ethical investing is worthwhile as I have seen in some other threads - I already know that you could find something unethical about nearly every company in existance but there is nothing wrong with having boudaries imo...)

Whilst I understand what you are saying, it is important to note that individuals have their own ethical stances. All the ethical funds also have different ethical stances. They publish their position in each area and you should filter the ones that match your ethics. The idea being is that you are left with a selection of funds that meets your ethical requirements and you select from them.

Or are there other socially responsible funds I could consider? I don't think I have found any that seem as good as this one.

You have not mentioned what your ethical filters are. So, we cant say whether a fund is suitable or not. We also dont know what funds have been filtered out in your research (it is your filtering after all). So, this question cannot be answered on the info you have given so far.

My other questions are, how much should I be holding in one fund? I currently have nearly 20k in VLS. How much more could I put in before it starts to get too risky?

What risks are you concerned about?

firestone

Also if your are looking at doing more ethical investing you could take a look at Triodos bank which as well as having an ethical S&S ISA does ethical cash savings accounts,ISA,bonds & current account

outlier

Not sure with the make up of this fund and others that they are really that ethical as the term once implied.Within my pension choices there is the Royal London range of sustainable funds which used to be run by the Co-op and have done well but still contain many of the big name companies you would expect in a global fund.

I'm not sure what you mean by this. Do you mean that there is a possibility that fund managers are not following their ethical screening criteria?

You have not mentioned what your ethical filters are. So, we cant say whether a fund is suitable or not. We also dont know what funds have been filtered out in your research (it is your filtering after all).

I have used the list on Your Ethical Money (yourethicalmoney.org/investments) and Investment Weeks sustainable investment awards (events.investmentweek.co.uk/sustainableinvestmentawards/static/2017-finalists-winners). There does not seem to be a way of filtering morningstar / trustnet etc for these types of funds...

With regards to my personal ethical filters, I don't want to invest in weapons production, companies with human rights abuses or pornograpy/prostitution. I'm fairly relaxed about all else.

Prism

Have a look at Fundsmith's sustainable fund https://www.fundsmith.co.uk/global/sef/home

Even if you don't end up with this one there are some interesting articles on ethical and sustainable funds

firestone

outlier wrote: »

I'm not sure what you mean by this. Do you mean that there is a possibility that fund managers are not following their ethical screening criteria?

I have used the list on Your Ethical Money (yourethicalmoney.org/investments) and Investment Weeks sustainable investment awards (events.investmentweek.co.uk/sustainableinvestmentawards/static/2017-finalists-winners). There does not seem to be a way of filtering morningstar / trustnet etc for these types of funds...

With regards to my personal ethical filters, I don't want to invest in weapons production, companies with human rights abuses or pornograpy/prostitution. I'm fairly relaxed about all else.

i am sure Sustainable funds are screening companies which would seem to address to your concerns.But i was making the point of how the funds still have a lot of the big names such as Apple & Amazon etc But was not sure if that was what you were looking for or something investing in a company trying to make a positive change such as the Baillie Gifford Positive Change fund or Green funds etc