What is Ethical Capital's investment philosophy?
Our investment philosophy is built on the belief that strong returns and strong values are not mutually exclusive. Here's how we think about investing.
Core Principles
1. Values Without Compromise
We believe investors shouldn't have to choose between their values and their returns. Our research shows that thoughtfully constructed ethical portfolios can perform as well as, or better than, conventional portfolios.
2. True Diversification
We build globally diversified portfolios with typically 40-60 holdings, targeting around 2% per position. This provides meaningful exposure to each company while managing concentration risk.
3. Active Ethical Screening
We go beyond basic ESG scores. Our team hand-screens thousands of companies, identifying issues that automated systems miss. We look for:
- Business practices that harm communities
- Environmental degradation
- Labor violations
- Products that cause social harm
4. Positive Selection
We don't just exclude harmful companies - we actively seek businesses making positive contributions:
- Renewable energy leaders
- Sustainable agriculture
- Ethical technology
- Community development
Portfolio Construction
Our portfolios are built using:
- Quality Focus: We invest in financially strong companies with sustainable business models
- Long-term Perspective: We're investors, not traders, with typical holding periods measured in years
- Risk Management: Diversification across sectors, geographies, and company sizes
- Cost Efficiency: We minimize trading costs and tax impacts through thoughtful execution
Continuous Improvement
Our philosophy evolves as we learn. We:
- Regularly review and update our screening criteria
- Incorporate client feedback and concerns
- Adapt to new ethical challenges as they emerge
- Share our learnings transparently with clients
This philosophy guides every investment decision we make, ensuring your portfolio reflects both your financial goals and your values.