Building a Portfolio to Be Proud Of

A few years ago I was feeling conflicted. I was doing Dry July to raise money for cancer support services at the local hospital. At the same time, I knew my International Shares fund had exposure to the world’s biggest tobacco companies. I was raising money to help deal with a massive health issue while investing in companies contributing to the very same problem.

It’s fair to say I knew very little about Values-Based investing. For me that means investing in companies that align with my values. Or investing with fund managers with a philosophy or strategy that aligns.

To use a well worn cliche, the process is a journey. I didn’t wake up one day and change my entire investment philosophy. I have made gradual changes and my thinking has evolved as I have learnt more.

There are many different definitions that are used in responsible investing including ESG, ethical, sustainable, impact (check out an explanation here). The reason I like Values-Based investing is that every investor:

  • has their own unique values
  • choose to apply (or not apply) their values to their investing

You may have consciously made this decision yourself or completely outsourced the investment decisions to an adviser or fund manager. But ultimately it is your choice to make.

A simple way to start is to use negative screening. What type of investments do you want to keep out of your portfolio? Some typical examples are:

  •  tobacco
  • companies that use child labour in their supply chain
  • firearms
  • gambling
  • fossil fuels

Well before realising my confict, Dr Bronwyn King a cancer doctor had come to a similar conclusion. But she was working with cancer patients and seeing first hand the effects and dealing with the deaths. Since 2010 Dr King has been on a global mission as a champion for tobacco free portfolios. Now super fund assets in Australia totalling $1.3 trillion have implemented a tobacco free policy.

Negative screening is just the gateway to building a portfolio to be proud of.


Disclaimer: When I discuss investment philosophy in this article, I’m referring to my own personal philosophy. When working with clients, each is unique and while this perspective helps facilitate discussion, it is they who decide what is important to them.



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