Ethical Performance Update

IBOSS Ethical Performance

The IBOSS PMS Ethical portfolio continues to perform strongly relative to its benchmark – IA 40-85% Shares – now outperforming over all cumulative periods up to, and including, 10 years. Additionally, the portfolio has outperformed in 7 of the last 10 discrete calendar years. Whilst this has been encouraging, it is worth noting that the portfolio has slightly underperformed our standard medium risk PMS portfolio over the longer term.

Whilst ESG and ethical investing have been at the forefront of investors’ minds more recently, it has traditionally been viewed as a rather specific and niche style of investing. Although this was certainly the case when we launched the portfolio back in 2008, it is now very much part of virtually every fund manager’s investment process. Considering that ESG/ethical investing has generated such strong returns for the last decade, it is no surprise that many of the more successful managers have run, or have adapted to run, more ethically conscious portfolios, including our own core range of model portfolios.

However, one thing which hasn’t changed is the element of confusion surrounding the definitions behind the screening of ethical, SRI or ESG investing, and this then extends out to the branding of such funds. We try to keep things as sensible as possible, so avoiding some of the most rigid criteria and instead selecting funds which are indicated as investing on what the manager believes to be along ethical lines. The result is a focus on providing a fully diversified portfolio with an ethical bias. With ethical investing being a subjective method, we feel we must leave it to individual advisers to assess whether they feel an investment is appropriate for their client. In summary, we would point out what is widely known and largely accepted by investors and managers alike; namely that the concept and interpretation of ethical investing varies considerably. So, whilst the definitions may well evolve over time, the subjectivity of all things relating to ethics will remain.

Cumulative Performance

Start of Data Performance Line

Discrete Calendar Performance

5 Year Defensive Characteristics

The Ethical portfolio has generated above benchmark defensive characteristics over 5 years, demonstrating lower drawdowns, a more conservative downside capture and superior risk-adjusted returns. It is important to note that these returns have been generated through alpha, rather than by taking excessive market risk (beta – 0.86).

This communication is designed for Professional Financial Advisers only and not approved for direct marketing with individual clients. It does not purport to be all-inclusive or contain all of the information which a proposed investor may require in order to make a decision as to whether to invest in the Fund. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation.

It is the responsibility of the Financial Adviser to ensure that they are satisfied with the research undertaken by IBOSS Limited in relation to the investments contained within each Model Portfolio which research shall be provided to the IFA, upon written request from the Financial Adviser. IBOSS does not warrant that information provided will be error-free.

Past performance is not a reliable indicator of future results. The value of investments may go down as well as up and an investor may not get back the amount invested. Data is provided by Financial Express (FE). Care has been taken to ensure that the information is correct but FE neither warrants, represents nor guarantees the contents of the information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein.