Royal London UK Ethical Equity Fund

The fund is designed to meet client demand for an ethical equity vehicle to complement RLAM's existing Royal London Ethical Bond Fund.  It will invest primarily in UK-listed companies and will consist of a concentrated portfolio of 40-60 holdings, aiming to deliver a combination of capital growth and income over the medium to long term.  The fund seeks to achieve annualised returns of 2-3% per annum in excess of its benchmark, the FTSE All-Share Index.

The fund will be managed by Bradley Mitchell, who has more than 20 years' experience of UK equities and has been the manager of the Scottish Life Ethical Equity Pension Fund since March 2004.  Under his tenure this fund has performed strongly, returning 42% over the five years to 31 March 2011, almost 20% ahead of the FTSE All-Share Index and more than 25% ahead of the ABI UK All Companies Sector (source: Financial Express, bid to bid, total return, GBP).

In support of the fund's investment research process, ethical screening will be provided by EIRiS, a leading independent provider of investment research into the environmental, social, governance and ethical impact of companies. The fund's ethical framework combines avoidance of companies involved in excluded activities with a scoring system to identify best-of-breed companies in permitted sectors.  From this universe, the manager will select out-of-favour companies where he believes there is a catalyst to drive the market to reflect their true value over the longer term.

Bradley Mitchell commented: "There is increasing demand from investors for a range of solutions to help them align their ethical and social priorities with the need for investment returns.  Having run an ethical portfolio that has consistently outperformed its benchmark, it is clear to us that the former does not have to come at the expense of the latter.  With the support of EIRiS, we are confident that we can identify excellent investment opportunities to deliver outperformance within clearly defined ethical parameters."

Robert Talbut, RLAM's Chief Investment Officer, added: "At RLAM we have a long tradition of offering ethical solutions to clients and are well-known for our fixed income capabilities in this area.  The launch of the Royal London UK Ethical Equity Fund is a natural extension of this.  The fund will allow investors to benefit from the experience of our award-winning equity team and its record of outperformance, whilst also exercising their ethical preferences."