The UK’s new workplace pension scheme NEST (National Employment Savings Trust) has appointed F&C Asset Management to run its ethical portfolio.
The equity portion of NEST’s Ethical Fund will be invested in the UK fund firm’s Stewardship International Fund, which is run by Sophie Horsfall.
The F&C fund, currently worth £365.6m (€413.7m) has negative screens on tobacco and alcohol production, gambling, pornography or violent material, weapons, animal exploitation, nuclear power generation, poor environmental practices, human rights abuses and supply chain labour standards.
NEST said it has selected an equity fund manager with a “robust approach to screening out companies with poor records when it comes to human rights, the environment and corporate governance, while seeking to generate value by investing in companies with a positive impact on society”.
The Ethical Fund will initially invest in actively managed and screened global equities, as well assome UK government bonds. The move follows research by NEST into the market for ethical investment as well as its target market’s primary ethical concerns. F&C’s Stewardship International Fund was launched in October 1987 and is benchmarked against the MSCI World Index. Its five-year cumulative performance is 13.45% against the benchmark’s return of 26.62%, according to its latest factsheet.
Its top 10 holdings include Wells Fargo, International Heritage Fund, Spectra Energy, Informa Plc, BG Group, Apple, Amdocs, Oriflame Cosmetics, HSBC and Crown Castle International.
NEST, expected to the UK’s largest pension fund with up to £100bn (€113.2bn) in assets by 2030, has also awarded a Sharia-compliant mandate to HSBC Global Asset Management. It will offer the two portfolios when it launches next year.
The Sharia component will invest solely in the HSBC Life Amanah Pension Fund, which passively tracks the Dow Jones Islamic Titans 100 index.