Leading adviser platform AJ Bell Investcentre is launching a Responsible Managed Portfolio Service (MPS) for advisers and their clients that want to invest in a low-cost, responsibly focused portfolio.
The Responsible MPS range aims to deliver long-term growth for clients who want their investments to avoid controversial industries as well as companies with low ESG rankings.
Investment approach
The Responsible MPS follows the same structure as AJ Bell’s Passive, Active and Pactive MPS options, with six risk-managed portfolios matching six risk profiles that are mapped to all the main risk profiling tools used by advisers. All the portfolios are well-diversified, multi-asset portfolios using cash, bonds, equities, and alternatives.
The portfolios in the new Responsible MPS are implemented primarily using ETFs and each has a 25% allocation to the VT AJ Bell Responsible Growth fund. Using this cornerstone investment gives AJ Bell the flexibility to make tactical allocation changes within the fund, rather than the rest of the portfolio, minimising clients’ potential Capital Gains Tax liabilities where relevant. It also provides exposure to more specialist ESG areas which would be too small to be held as direct investments within the MPS structure.
The Responsible MPS invest in ETFs that track a MSCI SRI index where possible, which gives a robust range of values-based exclusions and ensures that AJ Bell targets companies with high ESG rankings to invest in.
Environmental impact
The balanced portfolio in the AJ Bell Responsible MPS has an estimated carbon intensity that is 77% lower when compared to investing in the balanced portfolio within AJ Bell’s Passive MPS:
• Switching a £20k investment out of the AJ Bell Passive MPS into the Responsible MPS is equivalent to a high meat-eating couple going vegan
• Switching a £30k investment gives the same reduction in carbon emissions as taking a car off the road for 11,000 miles every year
• Switching a £50k investment gives the same reduction in carbon emissions as sending 313 bags of rubbish to land fill
• Switching a £100k investment gives the same reduction in carbon emissions as planting 19 acres of forest in 1 year
Tax wrappers
The Responsible MPS is available via AJ Bell Investcentre’s Retirement Investment Account, SIPP, ISA and General Investment Account.
Cost
In line with AJ Bell’s existing MPS options, the Responsible MPS has a market leading investment management fee of 0.15% with no VAT. All of the portfolio OCFs, including the AMC and underlying fund costs, are less than 0.5%, giving advisers a low cost ESG option for their clients.
|
MPS risk level |
Cautious |
Moderately Cautious |
Balanced |
Moderately adventurous |
Adventurous |
Global Growth |
|
AJ Bell AMC |
0.15% |
0.15% |
0.15% |
0.15% |
0.15% |
0.15% |
|
Underlying funds OCF |
0.27% |
0.29% |
0.31% |
0.31% |
0.32% |
0.35% |
|
Portfolio OCF |
0.42% |
0.44% |
0.46% |
0.46% |
0.46% |
0.5% |
AJ Bell’s normal platform charges will also apply:
The AJ Bell Investcentre annual platform charge for SIPP, ISA and General Investment Account is 0.20%, reducing on assets over £1m.
The annual charge for the AJ Bell Retirement Investment Account is 0.25% on assets below £500,000 and 0.20% on assets above £500,000.
Kevin Doran, chief investment officer at AJ Bell, comments:
“The demand for portfolios with a responsible investment approach has never been higher. Advisers have told us this is important to them and a growing number of their clients so, in line with our commitment to offering advisers choice, we have expanded our MPS to include a responsible investment option. The portfolios mirror our existing MPS service which is being used by an ever-expanding number of advisers and are also aligned with the existing risk profiling tools advisers use, so will be easy to integrate into their existing business processes.
“All the portfolios have OCFs of under 0.5% per annum, so we believe this is giving advisers a highly competitive solution for clients that want to invest responsibly without sacrificing the potential for positive returns.”