Unlike most fund managers, Andrew Millington takes all the stock-picking help he can get. First, there is his co-manager Lesley Duncan, who is currently on maternity leave. He also draws on the expertise of other fund managers in the Standard Life stable, such as Harry Nimmo.
But the most unusual source of advice is his clients. Unit holders of the Standard Life UK Ethical Trust are regularly surveyed on their ethical standards. Two years ago, they voted against airlines and, as a result, the trust's holdings were dropped.
The trust is prevented from owning tobacco stocks, and many major pharma and energy firms. At MoneyWeek, we're often dubious about ethical funds. Investing is difficult enough without placing more restrictions on what you can buy.
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The trust can only buy stocks that meet criteria set by the Standard Life Ethical Committee about half the FTSE 100 and a bit more of the FTSE 250, so it can miss out.
Last year, it couldn't buy GlaxoSmithKline, a solid performer in 2011. Yet the trust has performed well despite the constraints, up 89.6% over three years and up 13.4% so far this year.
Patrick Collinson on Fundweb believes the ethical stock-screening process is the secret of its success. "While oil, gas and mining are largely excluded, three out of the fund's four biggest holdings are wait for it oil, gas and mining groups: Xstrata, BG Group and Tullow Oil.
As Millington explains, screening is on a stock-by-stock basis. Because most of the big groups, such as Shell, are excluded, he balances his portfolio by ensuring that the ones he can own, he does."
Contact: 0131-225 2345.
Standard Life Ethical Trusttop ten holdings
| Vodafone Group 4.5 Xstrata Plc | 4.2 |
| BG Group | 3.9 |
| Tullow Oil Plc | 3.2 |
| Barclays | 2.5 |
| Smith (DS) | 2.2 |
| IMI | 2.2 |
| Standard Chartered | 2.1 |
| Talk Talk Telecom Group Plc | 3.0 |
| Holding 9 | 2.1 |
| Compass Group | 2.0 |
