Sparrows Capital, a specialist in Evidence-Based Investing, has launched a range of ESG portfolios under its platform-based model portfolio service, SCore MPS, for Financial Advisers and their networks.
The SCore MPS Responsible portfolios sit alongside the SCore MPS Factor range, which was launched on 20 February this year. The new portfolios are constructed from an increasing range of Index Funds and ETFs managed with ESG scoring and SRI filters.
The ESG ratings and screening process for the equity element of the Score MPS Responsible portfolios are designed to filter out activities violating fundamental ethical norms including Arms, Alcohol, Gambling, Nuclear Power and Genetically Modified Organisms. The process then applies enhanced environmental credentials with further screens on companies involved in Thermal Coal, Oil Sands, Oil & Gas, Power Generation. The remaining companies are then ranked according to their ESG scores and the portfolios weighted accordingly.
The SCore Responsible MPS comprises eleven portfolios containing equity exposures rising from zero to 100 per cent, in 10 per cent increments. This allows advisers to select the risk level appropriate for each client’s attitude to risk. The portfolios are globally diversified, multi-asset and liquid, with sterling as the base currency.
As with the SCore MPS Factor range, the ESG offering is priced at 0.1 per cent per annum, with a cap of GBP20 per client per month with no VAT. The fee covers portfolio construction, index selection, Index Fund/ETF screening, portfolio monitoring, risk management and rebalancing.
Commenting on the launch, Sparrows Capital Investment Manager, Mark Northway, says: “Sustainable investing has rapidly gained traction in recent years, supported and encouraged by governments and non-governmental organisations. We have been developing sustainable portfolios for our direct clients for some years, and the integration of ESG considerations is a natural development of our proven model portfolio service. Our unique ability to offer efficient, socially responsible ETF portfolios with a capped fee helps advisers address their clients’ investment preferences.”
Sparrows Capital believes that the innovative capped-fee charging structure appeals to advisers and investors of all types, challenging the status quo in an industry that has a reputation for defaulting to asset-based percentage fees. Sparrows Capital’s central objective is to deliver enhanced market returns to their clients as efficiently as possible.
