EdenTree is a boutique that specialises in socially responsible investing and has won a number of awards, highlighting its expertise in this area of the market. "Profits with Principles" is the firm's key mantra. Manager Chris Hiorns has been in charge of the fund for more than a decade and has delivered attractive returns over that time, especially as his value style has been out of favour for much of his tenure and particularly so in recent years. Hiorns favours higher quality companies which has led to a more defensive performance profile, with the fund often providing a degree of protection from falling markets but lagging when markets rise.
EdenTree has a four-pillared approach to responsible investing - research, screening, engagement and voting. The separate SRI team uses both positive and negative screens, including the use of Sustainal itics for company data. Negative “Avoiding Harm” - using a 10% of turnover threshold the following areas are excluded: alcohol, gambling, pornography, tobacco, weapons, intensive farming, animal testing for cosmetic or household products, oppressive regimes. Positive - looking for good corporate citizens and the manager uses “Nine Pillars” of Responsible Investing - Business Ethics (tax, product quality, company conduct), Community (apprenticeships, training, relationships and welfare of where they operate), Corporate Governance, Labour (diversity, equal opportunities, health & safety), Environmental management (recycling, energy efficiency, pollution control, sustainable products), Human Rights (+ land rights), Education (human development), Health (access to medicine, wellbeing), Urban Regeneration (affordable housing, green building). Portfolio construction and financial analysis is the responsibility of the fund manager. Hiorns targets businesses that are out of favour but intrinsically sound, and where a change in circumstance or economic conditions will bring about a recovery both in company fundamentals and improved investor sentiment, thus leading to superior returns.