Social & Financial Screens
Most ethical investors would never consider operating a casino, owning a liquor store, or making weapons of mass destruction. But, if you aren't paying attention to the ultimate destination of your investments, you may be doing just that.
We believe that a promising investment is one in which a company has strong fundamentals and avoids activities that can harm society. Using our unique proprietary software, we identify companies with material involvement in the following:
Companies with significant involvement in these areas are excluded from our portfolios.
Next, we exclude companies that have debt ratios greater than or equal to 33% and whose accounts receivables ratios are greater than or equal to 45%. Our ethical investment philosophy strives to identify companies that are financially responsible. That means that companies with high debt are excluded. These are companies we believe may be in financial peril.
Companies that successfully pass the above quantitative and qualitative screens are then submitted to our money managers for a rigorous financial analysis. Through a disciplined process, our money managers identify promising companies to include in their respective portfolios.
But our ethical screening doesn't stop once a portfolio is created. We periodically rescreen our portfolios for compliance. If we find a company is no longer compliant, it will be sold.
Tobacco kills about four million people globally each year. In the U.S. alone, tobacco is responsible for one in every five deaths. That's more than the number of people who would die every year if three jumbo jets crashed every day with no survivors (Institute of Medicine 2007)
About 40% of all crimes are committed under the influence of alcohol. (Bureau of Justice Statistics, 1998). According to MADD, alcohol kills 6 ½ more youth than all other illicit drugs combined.
For religious or other personal reasons, many people do not eat various kinds of meat or are completely vegetarian.
A study by the National Institute of Mental Health concluded that 4.2 million Americans are addicted to gambling, 60% of who have yearly incomes under $25,000.
Pornography permeates all aspects of the media: magazines, television, and the internet. It's a strong force against family and decency.
Less than 1% of what the world spent every year on weapons was needed to put every child into school by year 2000. But it didn't happen according to the State of the World, Issue 287 - Feb 1997, New Internationalist.
Financial institutions need to get more responsible. According to Motley Fool's Credit Center, Americans paid finance charges in 2001 of over 50 billion dollars. Experts also say the insurance industry earned about 60 billion dollars in profits in year 2006. That's as more Americans find themselves unable to pay their costly premiums.
|
|
