The two SRI funds, the Sustainable Pioneer Fund and the Sustainable Equity Fund, will also be available within a Triodos Ethical Stocks and Shares ISA. The Bank also offers a Microfinance fund for high net worth and sophisticated investors only, as well as shares (depository receipts) in the Bank itself. These are in addition to the Bank’s range of cash ISAs and other cash savings accounts.
The SRI funds, managed by Triodos Bank N.V. subsidiary Triodos Investment Management, come with a long track record, having been available in Europe for more than 15 years. Sterling share classes are now being made available for UK investors.
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The Triodos Sustainable Pioneer fund is a global equities fund investing in small and medium-sized listed companies – for example, bicycle manufacturer Shimano or medical equipment manufacturer Smith and Nephew – that focus on the sustainable themes of climate protection, healthy living, clean planet or are pioneers in corporate social responsibility.
The Triodos Sustainable Equity fund is a global equities fund investing in best-in class listed companies, such as British Land Company and Whole Foods Market, delivering superior social and environmental performance.
Until 28 June 2013 Triodos Bank is offering a 1% discount on the funds’ initial fee. During the discounted period the fee will be 3%, after which it will revert to 4%. The annual management charge is estimated as 1.25% for the Sustainable Pioneer Fund and estimated as 1% for the Sustainable Equity Fund. The minimum investment is £1,000 per fund.
Huw Davies, head of personal banking at Triodos Bank commented: "These funds combine strong financial performance with expertise in integrating environmental, social and governance (ESG) factors in the investment selection process."
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By GlobalDataThe screening process takes a zero tolerance approach on five activities, completely excluding all investments in nuclear power, unconventional oil and gas, hazardous materials and weapons. Triodos Investment Management then selects from each sector the 50% best performing companies regarding their environmental, social and governing policies and activities. On top of this selection process Triodos Bank applies its minimum standards to create an investment universe of around 348 companies available for investment. Only 22% of all Large Caps pass Triodos’ rigorous screening process.
As a sustainable fund manager, transparency is key. Triodos strives to be fully transparent about the projects and companies it invests in, publishing details of all investments on its website. This commitment to transparency is valued by customers and recognised globally in the sustainable investment market, receiving the high rankings of UNPRI.
The funds are well received by ethical IFAs. Lisa Hardman of Investing Ethically commented: "It is great to see a progressive and trusted bank like Triodos bringing a range of investment funds into the mainstream ethical investment space. With the growth and interest in ethically screened investments in the UK, new funds give the retail investor more choice and opportunity. This is to be welcomed and encouraged. Our clients really support the active engagement on SRI issues which some fund managers undertake, so they will like the engagement approach adopted by the Triodos SRI funds. We look forward to recommending the funds to clients."
Triodos Investment Management engages with companies before, during and after the selection process believing that even a small change in the policy or practices of a major company can make a significant global impact. In the case of arms manufacturers and traders, Triodos has been able to begin to effect change in the sector through engagement with the banks and asset managers that finance it. As a result of ongoing dialogue with several banks a number of them have reviewed their policies and are developing or refining blacklists. A few banks immediately sold disputed investments as a result of Triodos’ research team’s engagement. Such engagement results in some arms producers’ ability to attract new investors, which in turn can limit the arms industries’ activities.
Davies added: ‘We challenge UK investors to consider the impact of where they choose to invest, in the same way as thousands of savers have moved their money to more sustainable and ethical alternatives. The more money entrusted to our SRI funds, the more pressure we can apply on businesses to improve their sustainability performance.
The Triodos Sustainable Equity Fund delivered a return of 14.3% (R-cap share class) over the past year and has out-performed its benchmark (Morningstar large-Cap Blend Equity) over one and three years. This fund has a three-star Morningstar rating. The Triodos Sustainable Pioneer Fund (benchmarked against Morningstar Global Small/Mid Cap Equity) delivered returns of 9.3% (R-cap share class) over the last year. The Sustainable Pioneer Fund has a two-star Morningstar rating. These past performance figures relate to a Euro share class that will not be available to UK investors.
