John Fleetwood writes about 3D (ethical) investment research and portfolio development, impact investment, due diligence, impact investment founder. His recent LinkedIn Post about the Vanguard SRI Global Equity Fund is published with his kind permission here.
I’ve just finished looking at a fund for 3D Investing. Its the Vanguard SRI Global Equity Fund. For the life of me I can’t see what’s social or responsible about it. It invests in over 1900 stocks (yes thats right 1900!) that follow the global index.
It says that it applies the UN Global Compact to the companies in the index to arrive at a screened index that it follows. Big deal – it invests in 1915 out of a potential 2050 stocks in the benchmark index, meaning that the SRI screening only removes 135 out of 2050 stocks. For me, this undermines socially responsible investment by watering it down to something fairly meaningless. For example, the fund includes British American Tobacco (tobacco), General Electric (military systems), Exxon Mobil (climate change denier and major oil company), Monsanto (GM and business practice). Need I go on?
This just confirms the need for celebration of the good guys and brickbats for the bad. I’ve looked at every stock in the underlying portfolios of socially responsible funds available in the UK because its obvious that trusting to stated responsibility criteria isn’t good enough. I’ve come up with an investment philosophy that seeks to minimise ethical compromise, maximise social impact and deliver on financial expectations.
Take a look at the 3D Fund Analyst to see how this translates in practice.