IFAs unhappy with range of ethical funds on offer

by | Sep 26, 2016

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IFAs are not happy with the range of ethical funds currently available.

What’s more, this comes at a time when professional advisers are seeing an increase in client demand for globally diversified ethical investing.

New research from Heartwood Investment Management, the global multi asset investment specialist, shows that 25% of IFAs have seen an increase in client demand for ethical investing over the last few years. Yet, just 43% are satisfied with the current range of ethical investment options on offer.


The research also revealed that 81% of those IFAs canvassed would prefer to invest in a globally-diversified ethical portfolio for their clients. And just 10% prefer investing in a single-strategy ethical fund. The reason for this, says Heartwood, comes down to having struggled to manage their client’s risk when buying single strategy ethical funds.

Also, most IFAs prefer an integrated screening process when building ethical portfolios, with 62% saying what they need is to be able to invest in a diversified ethical strategy that applies both positive and negative screening criteria.

Heartwood has recently launched two new ethical multi asset investment strategies, Ethical Balanced and Ethical Growth. Both have risk/return profiles aligned with Heartwood’s long standing total return balanced and growth investment strategies.


Head of Investment Product at Heartwood Investment Management Matt Hollier said: “Our research has clearly identified a growing demand for ethical investing amongst IFAs and their clients. But digging deeper, there is a clear level of concern by advisers about whether single strategy ethical funds can deliver the appropriate risk / return trade off. We are struck that 4 in 5 advisers prefer a globally diversified ethical portfolio for their clients. It is also clear that a significant majority of advisers prefer an investment approach that blends a positive ethical overlay with standard negative screening.”

Head of Heartwood Investment Management Noland Carter said: “Clients are increasingly looking to have portfolios managed in a way that is aligned with their values and ethical concerns. Our IFA partners provide critical input to the design of our investment solutions and I am delighted that we have been able to launch new strategies that align strongly with the feedback we have received. More broadly, we believe this also reflects the needs of a wide range of private investors, charities, trusts and institutions.”

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