Socially Responsible Investing with Netwealth

SRI is an investment strategy that aims to generate both social and financial returns for an investor. Socially responsible investments can include companies making a positive sustainable or social impact and exclude those making a negative impact.

We believe for clients seeking a socially responsible approach it’s key to exclude those companies with the most negative social or environmental impact, and enhance exposure to stocks which score best on the same criteria. Explicitly, we aim to filter out the types of companies with the most negative current impact on climate change due to carbon emissions.

For this reason, our SRI portfolios invest consistently in exchange traded funds (ETFs) aligned with the MSCI Socially Responsible Investing family of indices, which have a number of exclusions and target the best 25% of the broader market capitalisation of their respective 'parent' indices.

In a nutshell, the SRI portfolios are designed to be consistent with our existing approach, but with an added SRI and climate filter.

The ETFs we include in our SRI portfolios track the performance of indices which are adapted from so-called ‘parent’ indices. These parent indices are usually unfiltered baskets of investments from a region or sector, weighted primarily by their value, and reflecting few, if any qualitative exclusions or exemptions. From this starting point, SRI indices are usually subsets of the parents with the most unsuitable stocks or bonds excluded, and more socially beneficial assets amplified in weight.

We are focused on providing high quality, globally diversified portfolios that are transparent in their holdings. You can find full details of each risk level's current holdings, along with historic characteristics and forward-looking projected returns in our modelling tools.

At Netwealth, we feel strongly that investors should be able to choose to reflect their ethical considerations without compromising on the calibre of an investment proposition. Likewise, many clients and potential investors have asked us about our views on socially responsible investing and sought our solution.

The Netwealth approach is consistent across all our portfolio ranges, and this applies to the SRI portfolios too. All direct costs of investing in SRI portfolios are the same as for core portfolios. However, the indirect costs of investing are expected to be slightly higher due to different instruments held. A key consideration in our instrument selection process is always to maintain efficiency, by reducing direct and indirect costs by selecting attractively priced and liquid strategies. Pleasingly, the costs of investing have been falling in recent years.

The total costs of investing with Netwealth are shown here.

You can choose to invest responsibly in any, or a combination, of our accounts depending on what is right for your investment goals. Choose from: General Investment, Pension, ISA and JISA. Speak with the team to find out which is best for you or email them at contact@netwealth.com.