In an article posted on New Model Adviser I suggest that 'ethical funds' should be considered by investors and advisers as a way to de-risk a portfolio. This drew the response from one commentator that I have a 'lack of understanding of risk that borders on the cavalier'. Hmmm do I? or am I actually thinking about risk in the future, rather than looking at an old text book?
"There is no known evidence that demonstrates that ethical funds are any less or more risky than other funds, so it is not possible for the inclusion of such funds to "de-risk" a portfolio. It may spread risk if a client has a concentrated portfolio, but for anyone with a sensible spread adding an ethical fund will have little or no effect on the overall risk level. To suggest that the inclusion of ethical funds will, of itself, de-risk suggests such a lack of understanding of risk that it borders on the cavalier."
Mark Hoskin is a Partner at Holden & Partners. Holden & Partners are Chartered Financial Planners who provide financial advice to high net worth clients, the majority of whom have a significant interest in ethical or environmental issues.
Mark Hoskin graduated with a History degree from Keble College, Oxford and went on to become a Chartered Accountant with Price Waterhouse. He cofounded Holden & Partners in 2003 and is a Certified Financial Planner and Chartered Financial Planner. Holden & Partners set up Worldwise Investor to help both advisers and investors understand quickly and easily how they can benefit from ethical and environmental investment in the UK market.
The value of ethical and green investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks of investing. Our aim is to provide you with the best information we can to help you make decisions about ethical and green investments. It is not to advise you on the suitability of an investment to your personal circumstances. Nothing written on the site should be considered personal advice, nor do Holden & Partners accept liability for any inaccurate information on the site. If you are unsure about the suitability of an ethical and green investment please contact Holden & Partners or your financial adviser.