Hargreaves Lansdown adds two more Responsible Investment funds to Wealth Shortlist

Hargreaves Lansdown has added the Janus Henderson UK Responsible Income and Trojan Ethical Income funds to its Wealth Shortlist.

new With these two additions, there are now five Responsible Investment funds on the list, out of a total of 71 funds – 14 of these are passive.

Responsible investing has grown in prominence in recent years, and UK savers put almost GBP1 billion a month on average into responsible investment funds in 2020, according to Investment Association (IA) data.

This trend has also been seen across Hargreaves Lansdown clients, who have put record money into Responsible Investment funds – net flows for 2020 were up over 4,000 per cent against 2016.

Dominic Rowles, Investment Analyst at Hargreaves Lansdown, says: “We believe that investing with ESG considerations in mind is simply good risk management – professional and individual investors alike should be looking to fill their portfolios with companies that are sustainable; delivering sustainable revenues, profits and – where applicable – dividends.

"Income isn’t easy to come by for responsible investors though: 70 per cent of all UK Equity Income funds invest in tobacco companies, over 80 per cent have a holding in the oil and gas sector, 78 per cent own mining shares, and around half invest in aerospace and defence businesses. Funds that avoid these areas while also aiming to generate a reasonable level of income are few and far between – but they are out there.

"Appetite for research and analysis on ESG and responsible investing has been on the rise in recent years, and with that has come a leap in demand for Responsible Investment funds. As a result of that feedback, we’ve committed to covering more Responsible Investment funds and today we’re announcing two additions to the Wealth Shortlist – we expect to see more added to the list over time.

"Trojan Ethical Income has been managed by Hugo Ure since launch in January 2016, and also leverages the expertise of Troy’s highly regarded Equity Income team. We’ve monitored both the fund and the team for many years, and over this time our conviction has grown. We admire the team’s experience, strong track record and their sensible approach, and believe they can deliver good long-term results for investors.

"Janus Henderson UK Responsible Income has been managed by Andrew Jones since 2012. As well having over 20 years’ experience managing UK equity income funds himself, Jones is supported by the wider Janus Henderson Global Equity Income team, which is also a treasure trove of experience. Three members of the team – Job Curtis, James Henderson and Alex Crooke – each have more than three decades of investment experience. Janus Henderson’s collaborative and friendly culture allows Jones to make the most of the experience around him. Following detailed analysis of the manager’s track record and several meetings with him, we’re positive on the fund’s long-term prospects.

"It’s not just ethical investors who could consider these funds. Their lack of exposure to typical equity income hunting grounds, like tobacco and oil and gas, means we expect the funds to perform differently to other equity income funds at times, which could bring diversification to a traditional equity income portfolio.”