UK investors can now choose to allocate their investments towards companies undertaking more responsible environmental, social and corporate practices.

Moneyfarm has created seven sustainable ETF portfolios with a low, tiered monthly management fee of between 0.35% - 0.75% that covers continual socially responsible portfolios screening, active management of portfolio and a dedicated investment consultant.

Moneyfarm has developed a Responsible Investment Policy to create the portfolios with the following aims:
● Minimise ESG risks
● Exclude companies not aligned to universal standards and values
● Explicitly include the evaluation of stewardship in the ETF selection process

Funds are selected and monitored using a standard set of ESG metrics, including company voting policies, carbon emissions, involvement in social controversies, and potential exposure to ESG-related risks with an emphasis given to environmental concerns.

Where Moneyfarm needs more information on a fund’s suitability, direct communication with the ETF issuers gives the team additional detail and insight. In addition to the standard ESG metrics, Moneyfarm uses its own filtering framework: a five-point ESG engagement layer which allows Moneyfarm to prioritise funds where asset managers show the highest level of engagement such as voting to drive positive change within an organisation.

Portfolios are constructed and managed by the Moneyfarm Asset Allocation Team, which is headed by Chief Investment Officer, Richard Flax, a 25 year industry veteran. As with Moneyfarm portfolios, investors choose a portfolio tailored to their individual risk appetite and investment goals.

The Moneyfarm socially responsible portfolios use high quality ETFs because they are liquid, transparent and cost-efficient investment vehicles. Socially responsible ETFs allow customers to have balanced, well-diversified portfolios with a greater focus on sustainability.

A base range of financial metrics used for all Moneyfarm portfolios ensures the socially responsible portfolio range remains fully diversified. Simulated performance[1] shows that, from 31 December 2015 to 30 June 2021, those who invested in Moneyfarm’s most adventurous socially responsible portfolio would have earned up to 5% more than its non-socially responsible counterpart. With a fully diversified socially responsible investment, the same modelling shows that investors would also see similar market ups and downs.

Richard Flax, Chief Investment Officer of Moneyfarm, commented: “We’ve launched our ESG proposition because we really wanted to offer our customers portfolios that meet their expectations, both in terms of performance and the wider social impact. There is no one single definition of ESG but increasing availability of data, investment solutions and disclosures by companies, plus a team effort lasting several months in defining the best rules and principles of our approach, make us confident that we can deliver a strong choice to investors.”

Giovanni Daprà, Co-founder and CEO of Moneyfarm added: “Moneyfarm’s underlying philosophy is to generate the best outcome in the long run for our customers in terms of risk and return. According to one of our recent customer surveys, 67% of respondents reported they would allocate at least 25% of their overall investments to a Moneyfarm socially responsible portfolio but 76% said they had a basic or limited understanding of ESG and wouldn't be confident making investment decisions on their own. That is why our hybrid model works so well, our customers can choose the socially responsible portfolios without having to face the complexities of evaluating the ETFs themselves. We recommend the SRI portfolios to customers as we believe that we can generate financial performance in a more responsible way. Which is what we know long term investors want.”