IFAM: Can you give us a brief outline of the King and Shaxson MPS proposition?
WB: If we step backwards a little here, it all started for us just over ten years ago. We were approached by a number of ethically-minded IFAs who wanted a model portfolio management solution for their smaller investment clients and one which had an ethical mandate at its core. They also wanted it to be accessible through wraps and platforms. Importantly, they were already entrusting us with their clients’ full discretionary mandates so the MPS was a logical extension and a good fit. Clearly, this new fund of funds portfolio would be designed to meet the underlying clients’ ethical values as well as risk/return objectives. This involved us investing in underlying funds which were not only appropriate for inclusion in an ethically balanced portfolio but also funds we had properly researched as meeting our specific objectives. At the time, we found that the universe of acceptable funds was fairly limited. We have seen this grow significantly over the years. Our proposition has always been to provide a robust, ethical product that would meet the requirements of our underlying investors and also which they could easily understand. It is important to us to safeguard our investors’ interests by applying a disciplined and thorough process of research into funds as well as to the investment houses which operate those funds. We continue to do this today.
Following on from this, we subsequently designed another range of Model Portfolio Services which involved a blend of direct equities and REITs as well as funds, for another group of IFAs. This has continued and is known as our Direct Equity Portfolio Service. We’re able to be slightly more adventurous on our ethical stance here. For example, when it comes to property investments,we could have REITs which focus on social housing,affordable rental housing and medical properties rather than conventional rights which are just available in the open ended market.
IFAM: How has the MPS evolved to suit differing client needs?
WB: The big change for us has been the growth in the universe of acceptable stocks. Many new ethical funds have come to market although, if I’m honest, some of these are just green wash. Even today, we still see some companies bringing out funds which contain relatively large holdings in global oil companies for example and some even hold gambling stocks. On the whole,most fund groups now have some ESG offerings. We’ve also seen a rise in the number of positively-positioned impact funds, whose focus is to invest in order to meet the requirements of the United Nations’ 17 Sustainable Development Goals. These impact funds appeal to more positively-focused ESG investors. With so many more funds with a Global ESG approach and far better ethical and SRI/ESG criteria which are well managed, it means we have a much broader fund universe available to us.All of this has meant that our range of portfolios has continued to evolve over the decade and is extremely well positioned to capitalise on all the investment opportunities which are now present.
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