Ethical equivalent of Vanguard LifeStrategy

mothemoneysaver

Hi,
I am quite new to investing. I currently have about £10k in Vanguard Lifestrategy 60 and 80 but am keen to switch to an SRI / ESG equivalent (mainly wish to avoid "sin stocks"). I am keen on a low cost multiasset fund and am not really confident enough to choose a mix of funds and bonds, but also not keen on the high costs involved with an IFA. Any suggestions? Could I maybe just go for 70% of my portfolio in the Vanguard SRI fund and 30% in a bond fund - any suggestions on a safe bet here?

Another_Saver

1. Buy your own stocks according to your personal ethics.
2. Vanguard Sri/ESG funds are fine and there are no reason to expect materially different performance, except with tobacco is it more arguable that they are so heavily discounted by being so unpopular as to present a buying opportunity
3. Or, accept that someone has to own those shares of vice industries you want nothing to do with, accept that you can't stop people smoking, drinking, gambling, fighting wars etc., but try and use some of those gains to offset the harm?

thegentleway

mothemoneysaver said:

Hi,
I am quite new to investing. I currently have about £10k in Vanguard Lifestrategy 60 and 80 but am keen to switch to an SRI / ESG equivalent (mainly wish to avoid "sin stocks"). I am keen on a low cost multiasset fund and am not really confident enough to choose a mix of funds and bonds, but also not keen on the high costs involved with an IFA. Any suggestions? Could I maybe just go for 70% of my portfolio in the Vanguard SRI fund and 30% in a bond fund - any suggestions on a safe bet here?

It's fantastic that you are considering the ethical impacts of your investments. I went through the same thing and did speak to an IFA that specialises in ethical investing (amusingly not because of the ethics but because they beleive ethical investments would yield higher returns moving forwards). The Vanguard SRI fund would be a good way to dip your toe into ethical investing. It won't be cost effective to speak to an IFA for £10k but I found morning star really helpful in looking for funds as it has sustainability and ESG ratings. I'd guess looking in GDP Moderate allocation you should be able to find a good ethical fund with around 70/30 allocation. Safe bet would be the ones from Liontrust or Royal London.

Mysterz

I don’t think you can have a fund comparable to the Vanguards on an “ethical” basis because tracking the index means you are usually capturing returns from EVERTHING in there ie good and “bad”
HL has some responsible investment funds within its Wealth Shortlist ie their recommended fund list. They are intended to be chosen as part of a portfolio approach with other funds so you would need to give the blend some thought with this route and they are not tracker prices. 

Mysterz

The Vanguard ESG funds would be closest but you have to combine them and build a portfolio yourself  

grumiofoundation

mothemoneysaver said:

Hi,
I am quite new to investing. I currently have about £10k in Vanguard Lifestrategy 60 and 80 but am keen to switch to an SRI / ESG equivalent (mainly wish to avoid "sin stocks"). I am keen on a low cost multiasset fund and am not really confident enough to choose a mix of funds and bonds, but also not keen on the high costs involved with an IFA. Any suggestions? Could I maybe just go for 70% of my portfolio in the Vanguard SRI fund and 30% in a bond fund - any suggestions on a safe bet here?

Legal and general offer 'future world' multi-assest funds (from memoery believe aims to invest a minimum of 50% of in investments tat fulfil their 'future world criteria' so may not be as ethical as you would wish). They also offer different ESG index funds, which may be an alternative to VGs ESG trackers?

A_T

Aviva have recently launched a range of funds that sound like ESG lifestrategy-type funds with an OCF of only 0.15%
https://portfolio-adviser.com/aviva-investors-to-shake-up-market-with-low-cost-multi-asset-range/

barnstar2077

Do these funds strip out companies like Apple, Nike or Amazon?  How many companies are there like Apple or Nike that sell expensive products that are manufactured for peanuts under questionable conditions in foreign factories?  What about how Amazon treats it's staff and suppliers?

thegentleway

barnstar2077 said:

Do these funds strip out companies like Apple, Nike or Amazon?  How many companies are there like Apple or Nike that sell expensive products that are manufactured for peanuts under questionable conditions in foreign factories?  What about how Amazon treats it's staff and suppliers?

It's counter intuitive because the extremity of global poverty is almost unimaginable but sweatshops are good for poor countries and boycotting them makes people in poor countries worse off. Conditions are bad in sweatshops but in poor countries they are the comparatively good jobs. E.g. Bolivians risk deportation to enter Brazil illegally in order to work in sweatshops there so they don't have to do backbreaking lower paid farm work, or scavenging/unemployment.

NottinghamKnight

thegentleway said:

barnstar2077 said:

Do these funds strip out companies like Apple, Nike or Amazon?  How many companies are there like Apple or Nike that sell expensive products that are manufactured for peanuts under questionable conditions in foreign factories?  What about how Amazon treats it's staff and suppliers?

It's counter intuitive because the extremity of global poverty is almost unimaginable but sweatshops are good for poor countries and boycotting them makes people in poor countries worse off. Conditions are bad in sweatshops but in poor countries they are the comparatively good jobs. E.g. Bolivians risk deportation to enter Brazil illegally in order to work in sweatshops there so they don't have to do backbreaking lower paid farm work, or scavenging/unemployment.

Struggling to fit that into ethical though. 

barnstar2077

thegentleway said:

barnstar2077 said:

Do these funds strip out companies like Apple, Nike or Amazon?  How many companies are there like Apple or Nike that sell expensive products that are manufactured for peanuts under questionable conditions in foreign factories?  What about how Amazon treats it's staff and suppliers?

It's counter intuitive because the extremity of global poverty is almost unimaginable but sweatshops are good for poor countries and boycotting them makes people in poor countries worse off. Conditions are bad in sweatshops but in poor countries they are the comparatively good jobs. E.g. Bolivians risk deportation to enter Brazil illegally in order to work in sweatshops there so they don't have to do backbreaking lower paid farm work, or scavenging/unemployment.

I see where you are coming from, but couldn't Apple afford to treat people a bit better?

I also remember watching a news story once about Nike sweat shops employing children (they lived in a shanty town outside the factory walls and paid most of their wages to the middleman who got them the job.)   The girls were in a pretty desperate situation, unable to really make any money, but unable to go home to their families, I remember there being a lot of crying in the footage.  The producers went to Nike to show them the footage.  Nike made sure all of the girls were fired,  Problem solved,  Yes they should make sure that kids are not hired, but would it have killed them to have gone over there and helped those girls out?  Would have been some great PR for them instead.  A quick google suggests that not much has changed since.