Q3: Responsible stewardship and ‘ESG’ seem to be in vogue with all asset managers at the moment. How can advisers avoid greenwashing and hold their managers to account on these issues?
Ben Gilbert: ESG certainly is becoming increasingly important. If I was an adviser looking to hold managers to account in this respect, there are a couple of things that I’d suggest.
Firstly, at Sarasin and Partners, ESG really is part of our heritage and we have a history in ESG investing. We are one of the top charitable investment managers in the country and these are clients who really hold you to account on key ESG issues. It’s important therefore, for advisers to do thorough due diligence on their manager’s history of ESG investing, to see if it really is in their DNA or just a more recent add on.
When it comes to greenwashing, I’d suggest a few things to advisers in this situation. The key thing if you’re trying to avoid greenwashing is to ask for concrete examples of where your investment manager has made an investment decision or where there’s something in the portfolios that wouldn’t be there unless they had their ESG analysis process in place.
The second thing is transparency within the underlying portfolios, so you can really look “under the bonnet”. We have launched a set of responsible models and within those we can show a full breakdown of the underlying companies within the portfolio. That’s another way that we can be held to account by our clients.
Q4: Sarasin has a long track record of multi asset investing. How important is that, given the fast changing nature of financial markets? The outlook for the bond market looks particularly challenging at the moment for example.
Ben Gilbert: It’s very important indeed. In fact, the Sarasin Multi Asset Dynamic fund has a public, auditable track record going back to the late 1980s.
Over that period we’ve seen a number of crises. Whether it’s the dot com boom and bust, the financial crisis or the Covid pandemic we can demonstrate to clients a track record for our multi-asset portfolios which shows our ability to navigate challenging periods.
Our investment approach is done on a collegiate basis. Whether an adviser introduces a private client, a charity via our charity authorised investment funds (CAIF) or a client through our model portfolio services, we’re all leaning on that same central investment expertise. The collective experience of our investment team, many of whom have been with us since the very early days, is vital to our success and strengthens our decision making in such fast moving situations.
When it comes to bonds, we’re facing a world where the headline yields on bonds are fundamentally below the inflation plus objectives of many investment managers. That obviously poses quite a challenge for asset allocators, as bonds will traditionally provide the ballast in diversified portfolios. Our ability to lean on our experienced investment team that has weathered the most recent significant bond crisis, which was the bond massacre of 1994, is a huge help. Inevitably, we and other asset managers are going to have to look at alternative ways of providing diversification within our portfolios so as to help us achieve our long term, inflation adjusted return expectations and objectives.
For more information about Sarasin click here
This document is for investment professionals only and should not be relied upon by private investors. This document has been approved by Sarasin & Partners LLP of Juxon House, 100 St Paul’s Churchyard, London, EC4M 8BU, a limited liability partnership registered in England & Wales with registered number OC329859 which is authorised and regulated by the Financial Conduct Authority with firm reference number 475111. It has been prepared solely for information purposes and is not a solicitation, or an offer to buy or sell any security. The information on which the document is based has been obtained from sources that we believe to be reliable, and in good faith, but we have not independently verified such information and no representation or warranty, express or implied, is made as to their accuracy. All expressions of opinion are subject to change without notice. The index data referenced is the property of third party providers and has been licensed for use by us. Our Third Party Suppliers accept no liability in connection with its use. See our website for a full copy of the index disclaimers. https://www.sarasinandpartners.com/docs/default-source/regulatory-and-policies/index[1]disclaimers.pdf. The investments of the model portfolios are subject to normal market fluctuations. The value of the investments of the model portfolios and the income from them can fall as well as rise and investors may not get back the amount originally invested. If investing in foreign currencies, the return in the investor’s reference currency may increase or decrease as a result of currency fluctuations. Past performance is not a guide to future returns and may not be repeated. There is no minimum investment period, though we would recommend that you view your investment as a medium to long term one (i.e. 5 to 10 years). Frequent political and social unrest in Emerging Markets, and the high inflation and interest rates this tends to encourage, may lead to sharp swings in foreign currency markets and stock markets. There is also an inherent risk in the smaller size of many Emerging Markets, especially since this means restricted liquidity. Further risks to bear in mind are restrictions on foreigners making currency transactions or investments. For efficient portfolio management the Fund may invest in derivatives. The value of these investments may fluctuate significantly, but the overall intention of the use of derivative techniques is to reduce volatility of returns. The Fund may also invest in derivatives for investment purposes. Neither Sarasin & Partners LLP nor any other member of the Bank J. Safra Sarasin group accepts any liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this document or any part of its contents. The use of this document should not be regarded as a substitute for the exercise by the recipient of his or her own judgment. Sarasin & Partners LLP and/or any person connected with it may act upon or make use of the material referred to herein and/or any of the information upon which it is based, prior to publication of this document. If you are a private investor you should not rely on this document but should contact your professional adviser.
© 2021 Sarasin & Partners LLP – all rights reserved. This document can only be distributed or reproduced with permission from Sarasin & Partners LLP.
