Socially Responsible Investing (SRI)
Investing responsibly doesn’t have to come at the expense of financial returns
IA Clarington Inhance SRI Funds, managed by SRI pioneers Vancity Investment Management Ltd. (VCIM), can help grow your wealth in a way that aligns with your personal values. VCIM uses a three-pronged approach to investing responsibly:
- Environmental, social and governance (ESG) screening
- Financial analysis
- Shareholder engagement
To identify potential investments for IA Clarington Inhance SRI Funds, VCIM’s portfolio managers assess companies based on seven main ESG criteria:
- Corporate governance
- Environmental leadership
- Employee relations
- Employee diversity
- Community relations
- Human rights practices
- Product sustainability
VCIM does not invest in companies whose primary line of business involves:
Importantly, VCIM’s assessment process involves more than just screening out companies that fall short of its ESG criteria. The portfolio managers actively screen in companies that demonstrate a firm commitment to progressive social values and environmental stewardship.
As of October 2019, all IA Clarington Inhance SRI Funds are fossil fuel free. This means the Funds do not invest in:
- Oil, gas and coal producers
- Pipeline companies
- Natural gas distribution utilities
- Liquefied natural gas operations
VCIM’s security selection specialists assess potential candidates for the Funds based on a wide range of fundamental financial metrics, including:
- Free cash flow
- Price-to-earnings ratio
- Earnings growth
- Return on equity
Portfolio managers also assess companies’ business models, competitive advantages and quality of management.
Only securities that satisfy the stringent requirements of both the ESG team and the financial analysis team are eligible for inclusion in IA Clarington Inhance SRI Funds.
VCIM implements a robust ESG monitoring and shareholder engagement strategy. All holdings are continuously monitored to ensure they maintain the high ESG standards that initially qualified them for inclusion in the fund. When companies appear to deviate from these standards, the VCIM team actively engages with management, either one-on-one or in concert with other shareholders or stakeholders.
VCIM also actively engages industry leaders to encourage them to elevate their commitment to ESG. The goal is to create a positive ripple effect across the broader industry.
IA Clarington Inhance SRI Funds
IA Clarington Inhance SRI Funds consist of a variety of standalone mutual funds and all-in-one portfolio solutions:
IA Clarington Inhance Growth SRI Portfolio was awarded the 2020 FundGrade A+® Award in the Canadian Equity Balanced category and the Responsible Investing Balanced category for the 2020 calendar year ending December 31, 2020. Performance for Series A of the Fund for the period ended December 31, 2020, is as follows: 17.9% (1 year), 9.3% (3 years), 8.1% (5 years), 6.3% (10 years). The FundGrade A+® Award is given annually to investment funds and their managers who have shown consistent, outstanding, risk-adjusted performance through the year. As such, the FundGrade A+® Award provides investors, advisors, and fund managers with a single, reliable, easy-to-understand fund-performance rating based on up to 10 years of history, notes financial data firm FundData which grants the FundGrade A+ Award.
FundGrade A+® is used with permission from Fundata Canada Inc., all rights reserved. The annual FundGrade A+® Awards are presented by Fundata Canada Inc. to recognize the “best of the best” among Canadian investment funds. The FundGrade A+® calculation is supplemental to the monthly FundGrade ratings and is calculated at the end of each calendar year. The FundGrade rating system evaluates funds based on their risk-adjusted performance, measured by Sharpe Ratio, Sortino Ratio, and Information Ratio. The score for each ratio is calculated individually, covering all time periods from 2 to 10 years. The scores are then weighted equally in calculating a monthly FundGrade. When there is more than one eligible series of a fund, an average ratio is taken for each period. The top 10% of funds earn an A Grade; the next 20% of funds earn a B Grade; the next 40% of funds earn a C Grade; the next 20% of funds receive a D Grade; and the lowest 10% of funds receive an E Grade. To be eligible, a fund must have received a FundGrade rating every month in the previous year. The FundGrade A+® uses a GPA-style calculation, where each monthly FundGrade from “A” to “E” receives a score from 4 to 0, respectively. A fund’s average score for the year determines its GPA. Any fund with a GPA of 3.5 or greater is awarded a FundGrade A+® Award. The RI FundGrade A+® was designed to recognize the top performing Responsible Investing (RI) funds not just based solely on returns, but using the same risk-adjusted performance measures that make the FundGrade so effective. The RI FundGrade A+ ® calculation is exactly the same as the monthly FundGrade calculation above, wherein funds are ranked based on Sharpe, Information, and Sortino ratios using up to 10 years of history. The funds with the top overall rankings in each of the Equity, Balanced, and Fixed Income categories at the end of the year are awarded the RI FundGrade A+ ®. For more information, see www.FundGradeAwards.com. Although Fundata makes every effort to ensure the accuracy and reliability of the data contained herein, the accuracy is not guaranteed by Fundata.
|Fund name||CIFSC category||FundGrade start date||Fund count|
|IA Clarington Inhance Growth SRI Portfolio||Canadian Equity Balanced||1/31/2011||284|