Our Responsible Investment Portfolios - Crystal Wealth Partners

Crystal Wealth Partners is proud to offer five responsible investment (RI) portfolios to help enable our clients on their journey towards sustainable and ethical investing. The five responsible investment portfolios we offer are:

Responsibly Invested Australian Equities
Responsibly Invested Global Equities
Responsibly Invested Moderate
Responsibly Invested Conservative Balanced
Responsibly Invested Balanced

We use a combination of negative screening, ESG integration (Environmental, Social, and Corporate Governance), sustainability-themed investing, and where suitable, impact investing as we believe they all play a part in responsible portfolio construction.

The RI criteria outlined above applies screening to the Australian shares, international shares, property and infrastructure and fixed interest asset classes , which covers around 70% of the portfolio.^

To ensure adequate diversification the RI portfolios may also invest in individual assets and asset classes where it is not currently possible to effectively screen. Assets and asset classes that are not screened include private equity, unlisted property and infrastructure , credit (a component of fixed interest), cash and alternative assets. The availability of reliable data in relation to ESG is evolving and Crystal Wealth works with our data providers to ensure our processes includes relevant new information as it becomes available.

^ Portfolios with a higher weighting to credit will have a lower percentage of the portfolio rated.

We use a five-step process to construct our responsible investment portfolios, outlined below:

Step 1: Fundamental investment analysis
For both direct shares and managed funds the criteria for selection includes a broad range of factors, such as:

A favourable outlook for the company and the sector in which it is operating
A profitable history and dividend distribution record
A long-established and consistent record of managing investments well
High conviction and different investment styles across funds

Step 2: Negative screening for excluding assets
The Responsible Investment portfolios do not invest in companies or Funds that have over 10% of their revenue related in the following areas:

Thermal coal
Alcohol
Tobacco
Gambling
Controversial weapons
Palm oil

While we understand this will not capture all preferences, our focus is on building and maintaining a robust and adequately diversified investment portfolio. It is very difficult to exclude all controversial issues, and significantly diminishes the available investment universe.

Step 3: Investment selection process using ESG factors
We use the risk ratings provided by an independent external research house (Sustainalytics, one of the leading providers of ethical, social and corporate governance research) to help our investment team identify and understand the financially material ESG risks and opportunities in the asset classes and the possible impact on the long-term investment performance of portfolios.

Step 4: Use of Investment Committee discretion
As these processes and filters are not perfect, we use discretion exercised by our Investment Committee to include or exclude companies or funds in portfolios. On occasions, for example, companies can have negative governance ratings that may impact inclusion; however, they could be temporary or the company may already have a public plan to address these issues or have a clear runway for ESG improvements.

Step 5: Analyse, monitor & report the impact on investment portfolios

We continuously monitor and analyse ESG data for potential portfolio adjustments;
We can provide reporting back to clients on the portfolio level exposure to controversial areas such as alcohol, gambling, tobacco and thermal coal;
We can measure the portfolio’s level of ethical, social and governmental risk relative to traditional or non-ESG benchmarks.

If you wish to find out more about our five new responsible investment portfolio, get in touch with one of our advisors on the ‘contact us’ page.

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