Fund focus: SVM All Europe SRI

By JEFF PRESTRIDGE, MONEY EDITOR AT LARGE
Updated: 09:28 EST, 22 November 2009

Each week, Financial Mail focuses on a top-performing fund and whether it's right for you: SVM All Europe SRI

The benefits of investing ethically have just been highlighted by National Ethical Investment Week, a campaign organised by several charities and fund managers to spread the word about this increasingly popular form of investing.

And right on cue, Edinburgh-based fund manager SVM has proved that ethical investing can be rewarding, with the release of impressive three-year figures.

SVM All Europe SRI fund - SRI standing for 'sustainable and responsible investment' - has posted three-year returns of 27%, bolstered by an impressive third year when the trust's price rose 102%. European funds on average generated losses in the same period of just under 2%.

Like an increasing number of ethical investments, the fund's brief is more positive than negative.

Though it totally avoids companies involved in arms and tobacco, it prefers a more positive approach, investing in those that are embracing environmental, social and ethical issues.

Once they become shareholders, the fund's managers - Hugh Cuthbert and Neil Veitch - then encourage management to become even more ethical.

Such an approach means the fund takes positions in companies that other ethical competitors may ignore.

Its biggest sector exposure, for example, is oil and gas - a sector not renowned for its environmental bent.

Its largest stock holding is Valiant Petroleum, an exploration company formed five years ago to find reserves in the Northern North Sea.

Despite the fund's three-year success, it has been a volatile ride. In the year to November 18, 2008, for example, the fund's price fell 45%.