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Our Sustainable & Shariah Investment Fund

Chris Eastwood
Tuesday 15th September, 2020

At Penfold we’ve been very proud to collaborate with the world's largest investment manager, BlackRock, by choosing them to protect and grow our customers' pension savings. After BlackRock outperformed the global equity markets in their first year, and protected our customers savings from the market turmoil during the pandemic, we knew we wanted to work with BlackRock again to launch a Sustainable Investment Option for our customers. 

We're therefore incredibly excited to announce today the launch of our new Sustainable plan. What's more, we're also launching a brand new Shariah plan alongside, to broaden our range of ethical investment options.

Our search for a Sustainable Plan

When it comes to investing our customers pension savings, we continually dedicate a huge amount of research into the best ways to balance between protecting and growing your pot over the long term.  We do this with four fundamental principles in mind: 

  1. Passive investing - using technology to invest broadly across whole markets and not relying on humans picking individual companies to invest in
  2. Diversification - spreading your savings across a wide range of different types of investments, to reduce the chance that they all go up or down in value at the same time
  3. Low cost - small differences in fees can accumulate to huge differences in overall pot size, so we keep the investment fees as low as possible
  4. Managed risk - using technology to adapt the way your savings are invested, in response to what is happening in the investment markets and the wider world

Sustainability is incredibly important for us, but it was equally important to find an option that meant our customers didn't have to trade off between their own future prospects and returns, for those of the planet. Therefore, we applied these four principles in our search for an investment option that would balance investment returns with sustainability. 

How does the Sustainable plan work?

Similar to our Standard MyMap fund range, the Sustainable MyMap fund invests across thousands of companies and other investment assets. But through its advanced technology it aims to invest only in companies that meet high sustainability standards and scores.

When selecting the types of companies it can invest in, it considers a broad spectrum of environmental, social and governance (ESG) themes, such as climate change, natural resources, pollution and waste, environmental opportunities, human capital, product liability, stakeholder opposition, social opportunities, corporate governance and corporate behaviour.

BlackRock's has three ways of improving the sustainability of the portfolio. These are:
- ESG Screening: stripping out controversial companies from the portfolio);
- ESG Enhancing: allocating more of your money towards companies with higher sustainability scores); and
- SRI (socially responsible investing): focusing on companies with the highest ESG ratings relative to their peers in each sector.

It's important to note that unlike our Standard range, there is only one risk level available, which holds the same risk level as our Standard level 3 fund.

Our Shariah Compliant fund

Not only are we launching a Sustainability focused fund, but we are launching another ethical fund, our Shariah compliant fund, as well!

Our Shariah compliant fund is managed by HSBC, and also matches our four fundamental principles of investing: passive investing, broad diversification, low cost and managed risk. 

It invests only in companies that are compliant with Shariah law. As a 100% equity investment, meaning that the entire fund is invested in stocks and shares, it carries the highest level of risk and potential returns, compared to our other Standard and Sustainable funds, but it's a great option for those looking for a socially responsible way to invest their money under Shariah law, without compromising growth.

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