Ethika AEPS – Statement of Investment Principles

The Ethika Auto Enrolment Pension Scheme has been specifically designed to meet the challenges of the Auto Enrolment Process offering unrivalled flexibility to our members.

The scheme will be made up of a carefully selected blend of Equity and Debt Investments whose profile is consistent with a sustainable, responsible and positive impact investment mandate conceived to deliver strong and secure returns.

The investments managed by an out sourced Fund Manager who will be targeted on blended returns of 6-8% whilst maintaining high levels (80% +) of liquidity to cater for the often transient nature of occupational scheme members.

The Fund Manager will apply an uncompromising set of assessment criteria to identify these opportunities. This rigorous selection process has been conceived so that at least 10% of funds under management will specifically seek out opportunities that, among other things;

  • Make positive contributions toward actively promoting a healthier global future.
  • Demonstrate commitment to enhancing the environmental and social good by having a direct impact in fostering development of services to underprivileged sectors of the community or advancing environmental sustainability
  • Openly disclose their policies and performance on critical social and environmental criteria
  • Uphold their responsibility to shareholders and investors

In order to ensure attractive financial returns the Fund Manager further assesses potential investments on 100% of the portfolio based on a careful analysis of:

Profitability: To provide the highest possible returns for investors in the fund and only invests in companies with sustainable profitability.

Management and Company Track Record: Well managed responsible companies are particularly well placed to enjoy competitive advantages from cost reductions, quality improvements, profitability enhancements and access to expanding and new growth markets.

Viability: In order to maintain secure and stable returns, a careful analysis of the short, mid and long term viability is performed on potential investments.

Strength of Technology: The Fund’s investment evaluation process is complimented by the incorporation of both qualitative and quantitative analyses of environmental, social and corporate governance (ESG) criteria, performance, practices and impacts.

The Fund Manager will be a boutique Discretionary Manager that can respond to the needs of the scheme as they change over time. The Fund Manager will carry out its own internal research, and aim to deliver absolute positive performance and significant relative performance even when equity markets fall.

The scheme will create personalised service from a boutique discretionary investment management business where trustees can speak to the person managing the fund, rather than a relationship manager. The Fund Manager will focus on “active wealth preservation” whereby our controlled risk approach can deliver positive returns in both challenging and not so challenging markets.

Trustees will seek a tailor-made investment portfolio, value-driven member focusing on long-term wealth creation.

The Default Fund

To provide a strategy focused on targeting cash +5% per annum with an absolute benchmark of 3.50%, through an approach that focuses on asset classes in which the Fund Manager sees the most value. 10% of the fund will be allocated specifically to ethical investments.

Statement Review

The Statement will undergo a fundamental review in quarter 4 (Q4) 2017 once there are significant number of contributors and a greater understanding of the members of the Ethika Auto Enrolment Pension Scheme has been gained. The trustees will consider more adventurous and less adventurous opportunities for members and further diversification of  scheme funds following that review.


April 2017