Marks & Spencer Money to launch new multi-managed ethical fund

On Monday (12th February) Marks & Spencer Money will launch an ethical fund designed to meet the needs of the growing number of savers who want to invest their money with the same socially conscious principles they apply to other areas of their life.

Research indicates more than one in five (22%) investors now consider ethical investment when choosing a fund and see it as a mainstream option.

The M&S Money Ethical fund, which can be sheltered within the tax-efficient ISA wrapper, will seek to provide investors with long term growth by investing in companies that make a positive contribution to the community or environment. It will avoid investing in companies that are primarily involved in the following activities; armaments, gambling, the fur trade, tobacco, and pornography, and companies that have a poor environmental record.

The fund will also avoid investing in companies that conduct or commission non-essential animal testing or companies that make use of child labour.

M&S Money has appointed HSBC Investments’ highly-regarded multi-manager team to oversee the portfolio. The multi-manager team has, in turn, carefully selected and appointed two asset managers to invest the funds; Jupiter Asset Management for its 18 years of experience in managing green funds and Sinopia Asset Management, part of the HSBC group, for its specialist quantitative fund management skills. Both managers will use rigorous ethical research techniques to ensure stocks selected meet the fund’s investment criteria.

Jupiter, using its own specialist in-house research team, will invest in companies that fall into one of two categories: those actively managing their environmental and social impacts; or those providing solutions to environmental and social problems that fit into one of Jupiter’s six green investment themes.

Sinopia will use its quantitative process to focus upon the best investments using ethical research provided by Innovest, the investment research specialists. Innovest will employ three criteria for grading stocks: Best in Class ratings, the UN Compact and negative screening.

Brendan Cook, chief executive of M&S Money, commented, "Our saving and spending decisions are increasingly influenced by a desire to take personal responsibility for our impact on society and the environment which is why we are launching a new ethical investment product.

"By appointing two of the best investment managers in the business to work closely with us, we are offering our customers the opportunity to invest in an ethically sound product without compromising investment performance."

Ethical funds produced impressive returns in 2006, with 70 per cent of funds in the UK All Companies sector offering returns high enough to place them in the top 25 per cent of the sector’s performance league tables. Furthermore, 88 per cent of ethical funds beat the FTSE All Share Index.

Emma Howard Boyd, Jupiter's head of socially responsible investment, said: "We are delighted to be working with M&S Money on its new Ethical Fund. There is no doubt that an increasing number of individuals are wanting to make a difference through their purchasing decisions, and this new fund will allow M&S customers to do so through their investments."

The initial charge has been discounted to zero for investors applying for the fund up until 5th May 2007. After this date the charge reverts to the standard 1 per cent, with an annual management charge of 1.5 per cent of funds under management. The minimum investment for both the ISA and Unit Trust is £100 as a lump sum and £25 for regular payments.