Transparency ratings for investment funds
When we examine investment funds, we rate them against the usual criteria that we apply to other companies, such as tax and environmental reporting. But we also want to rate them on the companies they invest in.
We did this first by rating them according to their transparency and engagement policies.
According to our assessment of these policies and disclosures, a company was placed in one of four categories. Companies that are not rated ‘Top of the pile’ for their transparency and engagement will generally receive comparatively much lower scores because they have been marked down according to the companies they invest in, many of which do not fare well against our strict rating system.
a) Top of the pile
Aegon, AXA, BMO, Castlefield, Legal & General, Royal London, Sarasin & Partners, Standard Life / Aberdeen Asset Management, Triodos, and WHEB
- A clear investment, engagement and voting policy, which includes consideration of ethical risks, with
- full or extensive disclosure of voting history, and
- a clear statement that these policies apply across all the assets under management.
If a fund was marked as 'Top of the pile' we did not mark it down for the specific investments it held, even if it held investments in companies that scored badly according to our ratings. This is because the fund was considered to have strong engagement and transparency and so was considered to be using its influence to improve companies it was invested in.
b) Getting there
AllChurches Trust (EdenTree), Impax Asset Management, Janus Henderson, Jupiter Asset Management, Kames (owned by Aegon), Liontrust Asset Management, Quilter Cheviot, Rathbone Brothers, Scottish Widows, SVM Asset Management
Some details of ethical investment, engagement and voting policies, with limited disclosure of voting history.
Industrivarden (LF Heartwood Growth)
Some reference to an ethical voting policy or engagement strategies, or a published stewardship statement, but more information required to assess how robust they are. No voting, or voting disclosure for a single subsidiary only.
Any 'Getting there' or ‘Vague/ unsubstantiated’ fund was marked it down for its investments according to information on our database. For example, if a fund held shares in a company that received our worst rating for animal testing then we would mark the investment company down by half a mark in the Animal Testing category.
d) Bottom of the pile
None of the funds in the scoretable got this rating.
This category would be for funds where no information on ethical investment, engagement or shareholder voting policies could be found.