FE Investments has launched a new range of responsible investment reports as the next step in leading the discretionary fund management industry to make responsible investments easily integrated into advice propositions and client management.
The leading MPS provider has launched the reports on all of its managed portfolio ranges and includes ESG reporting, data and other valuable insights, which help advisers explain the exposure risks associate with portfolios, funds and underlying holdings in clear and simple terms. Through the reports, the investor will be able to compare portfolios on a like for like basis and determine which model best suits their needs.
Taking a hypothetical £1m investment portfolio, the reports break down to the pound how much of this portfolio is geared towards thematic social and environmental issues, such as major disease treatment, sanitation, education and SME finance, as well as alternative energy, green building and pollution prevention. The reports aim to articulate the data behind responsible investing through the underlying themes that clients care about, which allows advisers to provide meaningful reporting and cut through the sometimes confusing ESG landscape.
“Until now much of the discussion and solutions developed surrounding ESG investment have been industry led. Our view is that no retail client wants an ‘ESG’ portfolio; they want to make investments which adequately reflect their beliefs. ‘ESG’ and the grouping together of these disparate and sometimes conflicting ideas are often not effective in meeting client demand.
Rob Gleeson, Chief Investments Officer, FE Investments
Based on MSCI data, social impact stats are included at holdings level, where companies included within a portfolio are ranked by their social and environmental impact revenue and their exposure to ‘controversial’ industries, such as tobacco, alcohol, weapons manufacturing, gambling and adult entertainment. Where controversies do exist, they are flagged on the report for adviser and client attention, so that the investor has transparency of the issues and that FE Investments will be accountable for the investments in the portfolio.
The launch of the reports is the latest development from FE Investments, which is one of the UK’s fastest growing DFMs on platform, having hit £5bn of assets under management (AUM) in December 2021.
Catering for a broad range of investors, FE Investments now offers five managed portfolio service ranges: Hybrid, its mass affluent proposition; Responsibly Managed, designed for investors who want to do less harm and do more good; Mosaic, designed for high net worth individuals; Natural Income, a range of five outcome orientated portfolios with stated yield and capital growth targets and Decumulation, which was launched in 2021 for the retirement market. The portfolios available on many leading platforms, with the Hybrid range currently available on 20.
Investors want to know their investments are doing less harm, doing more good and delivering on risk and returns. Investors are not binary and will always have different priorities. These reports allow them to better match their portfolios to these priorities rather than being forced into an either-or decision. We have developed a unique proposition and reporting that seeks to delve deeply into the sustainable aspects of investing, beyond what is currently available through existing ESG reporting solutions.
Rob Gleeson