The economic crisis that the world is experiencing has made the need to build explicit a socially sustainable economic model, inevitably connected with the aspects of social equity and respect for the environment. Two areas in which the current economic model has abundantly failed and in which it is necessary to acquire awareness, as these are fundamental aspects for the construction of a new model of life.
In particular, the financial crisis and various environmental catastrophes (such as the explosion of the "Deepwater Horizon" oil platform in the Gulf of Mexico or the earthquake in Japan) have shown what are the dangers one faces when one does not into consideration i risks related to the environment and environmental safety.
Also, important factors like the strong population growth, climate change and the danger of depletion of natural resources have raised the problem of economic sustainability. The awareness that economic progress will necessarily have to be accompanied by concepts of social justice and environmental protection is increasingly establishing itself.
In recent years, many investors and companies have shown themselves to be sensitive to these issues.
Companies are increasingly taking into consideration in their analyzes criteria related to the environment, social issues or ethical "corporate governance", while investors are increasingly aiming to use their savings in harmony with their personal and ethical values.
Being "ethical" in investments does not necessarily mean penalizing the performance of one's savings. In fact, some independent studies have shown that sustainable forms of investment generate risk-adjusted returns similar to and sometimes higher than those of traditional strategies. Among the forms of sustainable investment there are i Mutual funds and ETF which replicate theSocially Responsible Index”, or SRI: widely diversified investments, managed on the basis of a broad market benchmark, which select large companies operating according to a good profile sustainability.
For example, investing in equities from Europe and the Middle East which considers companies with high environmental, social and governance ratings belonging to the MSCI Europe & Middle East Socially Responsible Index outperforms investing in equivalent companies in the sector belonging to the MSCI Europe Index.
Are you interested in the topic of sustainable investment, which takes ecological and social aspects into account?
Well, why now we offer you a socially responsible balanced investment portfolio, simple but well diversified, with a medium level risk, bearable by many savers. We called it "Ethical“: The portfolio consists of supranational bonds ed ETF which track the socially responsible stock indexes MSCI Barra (established company specializing in the creation of financial indices).
The criteria adopted to select the shares to be included in the ETFs that we offer are:
1. avoid companies that operate in the deemed sector unethical (e.g. weapons, tobacco, violation of human rights)
2. favor companies that adopt the best social and ecological practices or that offer innovative solutions to environmental and social sustainability problems, such as water or electricity shortages.
Notably, the ETFs selected for this portfolio are three regional ETFs fromUBS Wealth Management concerning North America (UBS – ETF MSCI North America SRI (USD) A-dis), Europe-Middle East (UBS – ETF MSCI Europe & Middle East SOCIALLY RESPONSIBLE (EUR) A-Dis) and Pacifico (UBS – ETF MSCI PACIFIC SRI (USD) A-dis), which cover the main world equity markets, allowing for a geographical asset allocation and at the same time investing in companies which, compared to their sector counterparts, exhibit superior social and environmental performance to average. Among these three regional ETFs we decided to give more weight to the component Europe-Middle East since it is the geographical area that offers the greatest opportunities in terms of value.
Finally, we chose to diversify risk portfolio by inserting the bond component, which has little correlation with ETFs, to limit the natural fluctuations in the value of the portfolio induced by the equity component.
In that regard, we have included three in the portfolio bonds medium/long term. It is an Italian government bond (un five-year BTP), a supranational bond issued by the European Stability Fund maturing in 2020, and finally to protect itself from the euro risk we have included another supranational bond issued by the "International Bank for Reconstruction and Development" (maturity January 2018) in Australian dollars.
In our opinion, savers wishing to invest in the ethical portfolio are required to have a time horizon of at least 4-5 years and a minimum investment value of 15 thousand euros.
Want to see the composition of the wallet? Do you want to follow theperformance, risk , liquid assets? Just access the website www.adviseonly.com and search for "Ethical" among the portfolios in the Community, you can also become a "follower". Nit costs nothing: just log in (or register if you haven't done so yet), look for the Advise Only user, click on “Shared Portfolios” and click on the “Follow” icon. Easier said than done.
