Retired theatre wardrobe supervisor Mary Ruston has been investing for 20 years, with a view to boosting her pension and building up her rainy day fund. She has spent half of that time investing along a broadly ESG theme.
Over the past two decades, the 77 year-old has built up a portfolio of investment funds within her stocks and shares ISA. As well as getting a good return on her money, she has also invested in a number of sustainable investment funds. She also has money in a number of lower risk options, including cash ISAs and Premium Bonds.
“I had some spare money and wanted to see it grow in real terms, allowing for inflation. I also wanted to get a better returns on the money I had saved in the bank, so equity investments seemed to be the right way forward,” she says.
World leaders might be meeting in Glasgow this week at COP26 to discuss ways to tackle climate change, but Mary points out she has been investing in climate-related and “green” investments for 10 years, long before they were ever mainstream investment options.
Broad horizons
When she started out, Mary initially bought some direct equity investments but says many did not pan out as planned. “Since then I’ve tended to focus more on collective funds. To be honest I think direct equity investing is best left to the professionals,” she says.
She had also tended to buy funds based on strong performance. Typically, she would invest her ISA subscription each year in funds with a good five-year track record. But that did not always translate to similar returns as time progressed. As Mary has become more experienced, she’s looked at a bigger range of factors before investing her money.
“Over time there has been much clearer disclosure about things like fees and underlying holdings. I now look far more closely at costs and take more account of where funds are invested,” she says.
“Generally, I have invested in larger developed equity market funds and the returns have been ok.”
That approach has included investments in Fidelity European and Jupiter Distribution, the latter of which has since rebranded as Jupiter Multi-Asset Income and Growth.
Fidelity European has a four-star rating from Morningstar, reflecting its strong performance in recent years, relative to peers.
Indeed, Morningstar notes the fund has “an experienced lead manager, the backing of a well-resourced team and the consistent and measured application of an established process”. As a result, the vast majority of its share classes have an analyst rating of bronze. Over the past 10 years the fund has delivered annualised returns of 12.33%.
The Jupiter fund, meanwhile, has a Morningstar Quantitative Rating (MQR) of neutral. As a multi-asset fund it offers less volatility than straight equity funds, a potentially attractive feature to retired investors like Mary who may be more can be attractive particularly for retired investors who may have less of a risk appetite.
Despite being retired, though, Mary says she continues to invest in a number of more specialist sustainable funds. Many of these have holdings in higher-risk smaller company shares.
Pleasing results
Mary says that she has always tried to follow her principles when it comes to investing. With this in mind she has holdings in both Quilter Cheviot Climate Assets and Schroder Sustainable UK Equity.
Quilter Cheviot’s offering has an MQR of bronze, alongside a five-star rating. Despite its more specialist remit, the fund has delivered impressive long-term returns.
Over the past three years it has delivered annualised returns of 12.39%, and over a 10-year period investors have witnessed annualised returns of 10.4%, according to Morningstar data.
Mary is a long-term investor in this fund, having first bought it in 2011. She says she liked the way its managers were looking to invest in companies trying to address and tackle a number of issues, from resource scarcity to population change.
“I have three children so I do wonder about the future, [and] this fund seemed addresses some of these concerns,” she says.
“Little did I know back then that investing in such things would become far more mainstream. More pleasing is that investing with my principles has also generated a good return.”
