Elston Consulting has designed a range of Sustainable model portfolios built with 100 per cent SDR compliant funds. The portfolios have been launched by Elston Portfolio Management, a platform-based MPS provider.
The Elston Sustainable range of model portfolios aims to deliver a multi-asset portfolio strategy built entirely with UK SDR compliant funds. There are five risk-rated portfolios in the range, delivering a multi-asset strategy built entirely with SDR-compliant funds. Ongoing charges average 0.70 per cent in line with the average cost for actively manged SDR-compliant funds.
Each Sustainable model for each risk profile provides assurance to advisers that 100 per cent, of the allocation will be to funds that are compliant with the FCA’s Sustainability Disclosure Requirements (SDR). Although the FCA SDR currently only applies to individual funds, not portfolios, Elston has taken the proactive step of applying the same high standards to the model portfolios it designs by going above the original target level of 90 per cent as per the FCA Consultation CP22/20. It is expected that final regulatory decisions around the application of the UK SDR to MPS providers will form part of the broader review into the MPS market.
The firm writes that the new portfolios are designed for financial advisers and discretionary investment managers looking for sustainable, transparent investment solutions that comply with the UK SDR framework. Furthermore, it gives advisers the confidence they need when serving consumers with a high ESG preference that the portfolios (and funds within them) can be evidenced as being Sustainable from a regulatory perspective. This mitigates the risk of accidental greenwashing by advisers using the proliferation of “Ethical” and “ESG” portfolio which have <50 per cent SDR content. Whilst there are many ESG labelled portfolios available, this is thought to be the first Sustainable labelled portfolio range because of its 100 per cent allocation to SDR-compliant funds.
