Every day billions of pounds are lent or invested by banks, pension funds, insurance and investment companies on your behalf. It's your pension, savings or investment, but you don't often get a say in what happens to it, unless you ask!
Economic interests are increasingly influencing and dominating the political, social and environmental agenda across the world. We believe that financial institutions need to be more aware of the social and environmental impacts of the companies that they invest in. Ethical investment is an important part of this movement to help change corporate attitudes.
The traditional aim of companies is to say that 'our role is to maximise profit for share holders'. We say that 'yes, we want to make a financial return, but not at any price'. It is possible to profit with principles, in fact many companies are proving that by becoming more responsible corporate citizens, they are actually more profitable not less. Getting it right first time really can pay dividends and that helps your savings as well.
Through your pensions and investments you own equities or shares in different businesses and these shares can give a vote to the shareholder. A 'quality' ethical fund manager will use this vote to help influence improvements in corporate behaviour.
Ethical Investment is not just about influencing big companies, although that's an important agenda. Why should you invest in businesses whose activities or behaviour you fundamentally disagree with? Ethical investment gives you the choice.
You can also invest in the industries of the future. By changing your banking, or investing in ethical funds, you can focus money into exciting new developments in areas such as renewable energy, organic farming, healthcare and education.
To find out which ethical funds are in line with your ethical principles please refer to the ethical criteria tab, or click here
These three different strategies can be used in combination or on their own when analysing a funds ethical/environmental credentials.
Ethical/environmental funds, or Socially Responsible Investments (SRI), as they are sometimes known looks to avoid investing in certain business activities such as tobacco, animal testing, military, or a poor human rights record. In this case Ethical/environmental funds will use a negative screening process to avoid investing in these areas.
Ethical/environmental funds will also look to invest in companies that engage in positive business activities such as equal opportunities, basic necessities, education and training. They will therefore use a positive screening process in this instance.
In this case, investment decisions are made based on a company's record in relation to its peers. A fund might, for example, invest in the oil or gas sector, but only in those companies which are deemed to be the best in their class, with say, a better record on the environment and human rights than others in their sector.
In this instance the fund's manager works with and actively encourages the companies that they invest in to adopt or improve social, governance and environmental practices. This can involve meetings with senior management and voting at relevant shareholder meetings, i.e. Annual General Meetings.
To help you assess which fund meets your ethical/environmental principles we have prepared an analysis of each fund based on the two different screening processes i.e. positive and negative. To view these analyses please click on the “Positive Screening” or “Negative Screening” button below and scroll, down through the funds to view the results.
The data in the charts has been collated with the assistance of EIRIS (Ethical Investment Research Services). EIRIS assists Fund Managers with the screening process and is a subsidiary of The EIRIS Foundation (www.eiris.org), a leading UK charity working in the area of responsible investment. EIRIS is a not-for-profit organisation, with over 25 years-experience of providing information on ethical finance.
The chart below looks at ethical funds which aim to support companies that engage in positive activities such as environmental conservation, community involvement, training and education etc.
The chart below looks at ethical funds which aim to avoid investing in certain activities, for example animal testing, military, tobacco etc.
The charts are collated from data supplied by EIRIS and Capita Financial Software including data from Financial Express.
You will be able to buy into any fund with no initial charge. As the funds purchased will be in the “new share class” i.e. commission free. Therefore the only charges levied will be the individual fund managers annual management charge (AMC) see the list of funds available for more detail, plus our fee of 0.5%pa and Cofunds Platform Charge, which is a tired structure determined by the amount held on the platform for example :
The Cofunds Platform Charge rate is based on all your investments with Cofunds, where you are the primary holder. The more assets you have with Cofunds the lower the rate will be. This rate is then applied across your investments in commission-free share class funds only, to give their Platform Charge
The table below shows Cofunds standard annual charge rates.
£0 - £100,000
> £100,000 - £250,000
> £250,000 - £500,000
> £500,000 - £1m
Cofunds calculate your monthly platform charge by using the table above to calculate a blended rate and multiply this rate by the total value of your funds.
There are 3 steps they use to calculate your monthly Platform Charge, which are:
Step 1: They take the average of a client's total assets under administration (AUA) on the Cofunds platform for the previous month.
Step 2: Calculate the blended rate, based on the total AUA (see Cofunds annual charge rate above).
Step 3: Apply the blended rate to the client's average AUA across the previous month in commission-free share class funds only.
Total value of investments
Value of investments in commission-free share class funds
Step 1: average AUA for previous month (assumed constant AUA for the month)
Step 2: calculate blended rate (see rate card above (£100,000 @ 0.29%) + (£50,000 @ 0.26%)
(£290) + (£130) = £420 £420/£150,000
Step 3: apply blended rate to average AUA in commission-free share class funds for last month (assume 31-day month)0.28% x £150,000 x (31/365)(£290) + (£130) = £420 £420/£150,000
Total value of client's investments
Step 2: calculate blended rate (see rate card)
(£100,000 @ 0.29%) + (£50,000 @ 0.26%)
(£290) + (£130) = £420 £420/£150,000
Step 3: apply blended rate to average AUA in commission-free share class funds for last month (assume 31-day month)
0.28% x £100,000 x (31/365)
Example of a total annual charge, based on an investment of £150,000 as a primary account holder, and a fund AMC of 0.75%
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