Up to 50 equities, being ordinary shares listed on the NYSE or NASDAQ and cash, USD or NZD.
Equity investments to be in companies with strong balance sheets that meet the financial ratio’s:
- Interest-bearing debt less than 30%.
- Interest-bearing investments less than 30%.
- Illiquid assets greater than 33% (i.e. they are assets making or doing something for the good of mankind that exceed 67% of total assets).
Prohibited activities:
- Products whose return is based on receipt of interest. Including money lending*.
*Explanation: this excludes all financial institutions, Banks, Money Lenders and Insurance Companies. - Gambling and speculative investments*
*Explanation: this is not just a prohibition of gambling organisations like Casino’s, but also excludes high-risk investment products that rely on chance for success, eg. hedging products. - Derivatives*
*Explanation: these are a high-risk product that rely on chance for success, these are gambling. - Alcohol.
- Tobacco.
- Weapons of war.
- Adult entertainment.
- Gold and Silver hedging.
- Pork*.
*Explanation: This limits the investment in meat-based businesses. - Leverage* (i.e. borrowing against investors (your) money, not assets).
*Explanation of leverage: Leverage is a practice of many fund managers. Leverage puts your investment at an unethical risk. Leverage is absolutely prohibited. - Fossil fuel exploration.
If an investment is suspected of not complying with the Ethical Mandate, it is sold on the next trading day.
CASH
- Any cash held in the Scheme is held in USD or NZD dollars interest-free bank accounts.
- Non permissible income generated from non-compliant business operations or investments (both operations and non-operations) should not exceed 5% of the total income generated by the company invested in.
- Each year the effect of the non-permissible income is “purified” by a donation to the poor.
- Purification is calculated by the Manager and AE Investor pays the sum calculated annually to charities for the poor.
- Our investment philosophy, strategy, and policies all derive from the Objectives.
- It has become a popular marketing feature by Fund managers to claim Ethical attributes in their marketing material. Always-Ethical has from its inception in 2014 always had an ethical mandate that it strictly applies.
- The popular marketing feature is to use a scale called ESG.
- ESG means Environmental, Social and Governance factor are rated and considered when deciding on an investment.
- The key to our investment policy is all our investments must be “doing or making something for the good of humankind”.
- This is more defined and therefore in our view stricter than ESG. It focusses on the two more important factors of Environment and Social.
- These two have a difficult balance, for example we invest in Lithium extraction, this as with rare earth minerals is an environmentally challenging exercise. Without Lithium and rare earth minerals there are no batteries for cars, planes, cell phones, computers and most modern devices. The investment decision has to balance all aspects of the investment.
- Provided the investment Governance is ensuring the investment is doing or making something for the good of mankind, for an Always-Ethical investment decision the Governance aspect of ESG is met.
- ESG ratings come from the businesses as many of the factors cannot be measured by Investment Managers without inside knowledge.
- Inside knowledge is illegal.
- We believe our strict ethical mandate provides Investors with a high degree of assurance we are as we claim in our investment decisions Always Ethical.
- The Venn diagram
shows the interchange between our strict ethical mandate and the ESG rating system.