Industry Updates

AJ Bell launches ESG fund of ETFs

Ongoing charges figures capped at 1%

George Geddes

a man wearing a tie

AJ Bell has launched a responsible growth fund that is comprised of environmental, social and governance (ESG) ETFs.

The 12 ETFs that make up the responsible growth fund are all tracking MSCI indices to ensure a consistent ESG standard is met across all products.

The ETFs include responsibly screener which removes controversial companies that are in business such as tobacco and alcohol or companies that breach the UN Global Compact.

Once these companies are removed, stocks with sufficient ESG scores are then included in the ETFs.

AJ Bell has also calculated the environmental impact of divesting from the MSCI ACWI index into the fund. For example, switching £10,000 investment out of the MSCI ACWI index into the fund is equivalent to recycling 15 bags of rubbish rather than sending them to landfills each year.

The responsible growth fund has an annual management charge of 0.15% with an ongoing charges figure (OCF) capped at 1%.

Its largest holdings include the iShares MSCI USA SRI UCITS ETF with 15% weighting ahead of the Xtrackers ESG MSCI Emerging Markets UCITS ETF and the UBS MSCI World Socially Responsible ETF (hedged to GBP) with 13% weighting each.

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Kevin Doran (pictured), chief investment officer at AJ Bell, commented: “Responsible investing is something that clients are increasingly asking advisers about and this is only going to increase over the coming years.

“Our new fund offers advisers a simple and transparent way to add a responsible dimension to their client’s portfolios without sacrificing the potential for positive returns.”

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