Ethical Investment Policy

We are grateful to be entrusted with managing your investments and take our responsibilities very seriously. Our primary aim is to use our talents and long experience to deliver superior returns for the portfolios we manage. At the same time we strive to maintain a socially and ethically responsible vision.

What is Ethical Investment?

Our concept of ethical investment includes the promotion of responsible business practice through favouring investment in soundly-run companies, whilst avoiding investment in organisations with material links to:

 Human rights abuse (bonded labour, child labour, political oppression, etc)

 Environmentally harmful areas (pollution, destruction of habitat, etc)

 Socially harmful areas (tobacco, gambling, etc)

However, the implementation of an ethical investment policy is open to interpretation. Legally, the duties of a company’s board of directors are owed to its shareholders, but within a global economy, companies operate within a complex matrix of relationships involving suppliers, customers, employees and government authorities. In our view, it is unreasonable to hold a company responsible for the actions of all these associates.

For example, if you decide that investing in a casino operation is unacceptable, what about the construction company that built that casino, or the bank that holds a mortgage on the casino? Do you hold shares in the casino’s advertising agency, its recruitment consultants, or its contract cleaners? Where to draw the line is unclear, since any company’s corporate relationships fall within an ethical spectrum, rather than into distinct categories.

Do our fund managers follow an Ethical Investment Policy?

We believe so. When valuing a potential investment, we take full account of ethical risks in our assessment. In practice this approach precludes buying the shares of those companies whose core activities are patently unethical (e.g. tobacco), and encourages investment in companies with sound principles and responsible management. In particular, we promote good corporate governance through a policy of always exercising our voting rights at company meetings, and in that context we are frequently oppose ill-founded proposals. Our policy is intended to encourage company managers to adopt good practices so as to attract further investors, thereby increasing their company’s share price, (and our investment on your behalf).

At company meetings it is our policy to vote in support of full compliance with The Combined Code on Corporate Governance, against excessive remuneration packages, and against the re-election of all directors on the Remuneration Committee of those companies awarding excessive packages. This policy sets us apart from most institutional investors.

By bringing ethical assessment into the heart of the investment process within a market context, we seek to avoid various pitfalls that other investment managers have encountered when constructing ethical portfolios in a mechanistic fashion. Such pitfalls include portfolio concentration into a few sectors, and underperformance arising from buying over-rated companies.

We believe that our policy on ethical investment addresses these issues honestly, responsibly and practically, so that our existing and prospective customers may take assurance from this approach.