08 Aug 2021
The FCA’s ESG & sustainable investment principles, announced on 19th July, put further ESG suitability pressure on advisers. It’s hard enough for advisers to conduct informed ESG suitability conversations with certain clients, but they also need a credible solution.
We hear a lot about ‘greenwashing’, and it’s important that advisers recommend investment solutions that genuinely do what is written on the tin. RSMR’s extensive, qualitative fund research process usually rejects any investment strategy that is less than three years old, which really helps given the plethora of ESG fund launches we’ve been seeing recently.
In 2012, RSMR introduced its Responsible fund ratings and, five years ago this month, launched the RSMR Responsible Balanced Portfolio within its MPS. The portfolio has a record of excellent performance from a portfolio of 27 funds*, each of which has an ethical, sustainable or responsible investment approach (or a combination of these.) RSMR also offers the Responsible Cautious Portfolio and Responsible Dynamic Portfolio, which celebrated their three year anniversaries in March.
The Responsible Balanced Portfolio’s larger equity holdings include funds from groups with long-standing responsible investing credentials, such as Aegon, BMO, EdenTree, Jupiter, Liontrust, Pictet and WHEB, while its larger fixed income holdings are drawn from some of the same fund management groups alongside others with equally long-standing responsible credentials such as Rathbones, Royal London and Threadneedle. Other groups represented include Gravis, Quilter Investors, Stewart Investors, Troy and Unicorn, providing investors with a diverse range of companies and strategies whilst focusing on those with a demonstrable track record of responsible investing.
Our MPS offers advisers a range of attractive, cost effective options to align with investor risk tolerances and investment preferences. The RSMR Responsible rating can be considered as going beyond simple ESG analysis, ESG+, with each fund that we rate having gone through additional analysis specifically focusing on its responsible investment process. Once a rating has been applied, a fund is categorised as ethical, sustainable, thematic or impact. The RSMR Responsible portfolios, therefore, provide a pragmatic solution for advisers seeking greater exposure to responsible investment supported by a rigorous fund research process.
The RSMR Responsible portfolios are risk profiled by Dynamic Planner and Synaptic and are available on the Aviva, FundsNetwork, Nucleus, Quilter, Standard Life Wrap, Standard Life Elevate and Transact platforms. They are also aligned with Fund Ecomarket’s SRI Styles. The annual management charge for the RSMR MPS is 0.15%.
The RSMR Responsible Balanced Portfolio’s return since launch five years ago is 48.8%, compared with the IA Mixed Investment 20%-60% Shares average of 31.3%. Over three years the portfolio has returned 22.7% versus 14.5% achieved by the sector average. These figures** are net of all charges including the underlying funds.
*At 30 June 2021; excludes cash fund holding. **Source: Morningstar, net of all fees, to 30 June 2021
Jon Lycett, Business Development Manager, RSMR