Balanced SRI Fund explanatory statement
The Balanced SRI Fund is one of eight Defined Portfolio unit trusts.
The objective of the Balanced SRI Fund is to grow the value of unit holders’ capital, relative to inflation, over the medium to long term. The fund will generally hold a diversified portfolio of growth and income assets.
The Balanced SRI Fund is a unit trust which has been developed and is managed by Craigs Investment Partners Investment Management Limited a wholly owned subsidiary of Craigs Investment Partners Limited.
The guiding philosophy of the Balanced SRI Fund is to endeavour to hold a diversified portfolio of investments that the manager considers to be environmentally and socially responsible, whilst still applying Craigs Investment Partners’ traditional portfolio investment criteria.
Currently, the manager does not actively screen for investments for the Balanced SRI Fund that have positive or negative governance practices. However, this consideration is taken into account in the overall assessment of the financial viability of an investment.
In selecting individual shares, funds and other investments for the Balanced SRI Fund to invest into, the manager will use a combination of positive and negative screening criteria. The criteria adopted will change over time as standards relating to corporate reporting and accountability and codes of conduct advance.
The manager will use its best endeavours to ensure that the Balanced SRI Fund will NOT be invested in companies engaging in the following activities:
- Nuclear weapons and the nuclear power industry
The manager will also use its best endeavours, using publicly available information (including annual reports issued by investment companies), social responsibility indices compiled by independent market observers (e.g. FTSE4Good industry series), along with any additional information from our in-house research resources, to ensure that no investment within the fund is engaged in poor labour practices, cruelty to animals or excessive environmental pollution. No formal definition, criteria or weightings are used in assessing these elements and each investment is screened separately.
Companies that will be considered are those that in the view of the manager:
- Make a positive social contribution
- Seek to minimise adverse environmental effects from their operations
- Have strong governance practices, ethical standards and track records
- Embrace triple bottom line reporting
The manager will use its best endeavours, using publicly available information (including annual reports issued by investment companies), along with any additional information from our in-house research resources, to ensure that investments within the fund do meet these criteria. There are no pre-determined relative weightings to these criteria. Available investments within this fund must meet Craigs Investment Partners Limited’s existing investment selection criteria.
In a practical sense, for international equity investments, managed fund and index funds, the manager will primarily focus on:
- Companies that are members of recognised SRI indices such as the FTSE4GOOD index or the KLD Social Index
- Managed funds that invest on an SRI basis, employing positive and/or negative screens
- Exchange-traded funds based on an SRI index
In the event that a stock included within the fund is found to be in breach of the fund’s investment criteria, that holding will be divested as soon as practicable, and for the best price practically achievable.
The perception of the ethics of a company or industry can change from investor to investor, as well as over time. The manager aims to keep abreast of new technology and trends, as well as changes in public opinion, and will adapt as required. The manager retains the right to invest in companies that, at first glance, may not appear to fit the above criteria, if it deems that the negative effects of the company are outweighed by the positive.
Craigs Investment Partners' research team constantly monitors companies within the Balanced SRI Fund and recommends adjusting holdings on a needs basis. The Balanced SRI Fund is formally reviewed every 6 months.
For more information read our Defined Portfolio Investment Statement.