Fund Selection Criteria
Our fund selection criteria document provides insight into our selection process.
Fund Selection CriteriaGreen Path Portfolios
A low-cost, actively managed portfolio service dedicated to sustainable growth through the use of environmental, social and governance (ESG) investment values.
Socially responsible investment (SRI) and the use of ESG investment criteria to guide investments has moved into the mainstream. There is now overwhelming evidence that sustainable investment can deliver comparable returns with traditional investments and also offer opportunities for outperformance based on reduced risk.
All our investments are rigorously screened using ESG criteria. The latest strategies, which we adopt, take a positive approach by seeking sustainable investments that have a greater potential to boost returns. This is achieved by integrating environmental, social and governance (ESG) considerations into the investment processes.
The FT reports that since 1990, the MSCI KLD 400 Social index, comprising companies with strong sustainability profiles, has outperformed the S&P 500, with annualised returns of 11.2 per cent versus 10.7 per cent. Sustainable companies are typically less exposed to tail risk such as environmental accidents or punishment from regulators. (FT, ‘Sustainable investment can propel long term returns’, 18/9/2018).
Environmental
Investments are considered in terms of their impact on the environment. This may involve looking at issues such as pollution, waste management or climate change.
Social
Social aspects of investments include the employment practices of companies, for example, making sure they’re not involved in modern day slavery.
Governance
The focus here is on how a company that we invest in is managed. Does it treat its stakeholders (shareholders, employees etc.) fairly? Does it pay its’ executives too much?
Key Objectives
- Globally diversified investment
- Maintain the integrity of the environment and the use of natural resources
- Recognise the civil, economic and social rights of every human being
- Promote sustainable development today without compromising future development
Cautious Portfolio
The Green Path Cautious Portfolio is a SRI/ESG growth strategy. It is aimed at medium to long term investors who are seeking a relatively cautious investment that has a genuine prospect of capital growth.
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Balanced Portfolio
The Green Path Balanced Portfolio is a SRI/ESG growth strategy. It is aimed at medium to long term investors who are seeking capital growth from a diversified portfolio of mainly equity investments.
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Strategic Portfolio
The Green Path Strategic Portfolio is a SRI/ESG growth strategy. It is aimed at medium to long term investors who are seeking capital growth from a diversified portfolio of mainly equity investments.
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Performance Report
Here are the FE Analytics reports that compare the relative performance over the past year and the respective technical ratios for each of the three Green Path Portfolios against one another. These reports are updated monthly.
Performance Report
Quarterly Performance Review
This review covers the quarter until the 30th April 2022.
Quarterly Performance ReviewGreen Path portfolios focus on a number of key factors
- Climate change is becoming a reality.
- Good corporate governance is important to achieve a sustainable business.
- A transformation is occurring in energy sources with a rapid rise in renewable energy.
- Technology is changing what we demand and what we consume. Only adaptable companies will survive.
- Investors can be quick to punish companies found to be using child labour or damaging the environment.
- Information on ESG policies of companies is more widely available.
- Regulation is forcing companies to adopt ESG compliant strategies.
ESG investing has been driven by key changes in investor behaviour. Many private investors want a more active, objective driven approach. There is also a realisation that ESG focused investments are not just philanthropic but a way to future proofing your investments where performance need not be compromised.
Sustainability and fair opportunity have led to investors pursuing the concept of a healthy balance between investment returns and the long-term preservation of our natural resources and the respectful treatment of labour and equality.
All of these factors are in themselves forceful drivers of change. Taken as a whole, the ESG effect has become a compelling element moving to the centre of institutional financial activity.
For a rapidly increasing number of investors, ESG forms the core focus of their investment strategy. This is not simply a moral principle, but as the most relevent factor in providing a model for sustainable returns.
Future proofing your investments
ESG has become one of the fastest growing areas of the investment market. Investing on the basis of environmental, social and governance factors has increasingly moved to the centre stage.
ESG investing has been driven by key changes in investor behavior. Many private investors want a more active, objective-driven approach. There is also a realisation that ESG focused investments are not just philanthropic but a way to future proof your investments where performance need not be compromised.
Sustainability and fair opportunity have led to investors pursuing the concept of a healthy balance between investment returns, the long-term preservation of our natural resources, and the respectful treatment of labour and equality.
ESG Fund Selection
All our investments are rigorously screened using the three principles that form the core of our ESG investment philosophy. The ESG credentials of each index-tracker fund or exchange-traded fund is validated in accordance with our stated ESG principles: environmental, social compatibility and good governance. We only use funds that are clearly designated ESG investments.
ESG investors can follow their convictions without fear of compromise
Prof Mike Buckle
Investment Manager
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