3D Investing Methodology

Our investment selection criteria and process

The starting point for establishing a 3D portfolio is defining a wide universe of socially responsible or ethically screened funds including OEICs, ETFs, SICAVs, equities and investment trusts. We then draw up a short-list of funds and stocks that meet our pre-described criteria, with due diligence being conducted on this short-list to arrive at a final selection.

The 3D Investing Universe

The universe of potential investments is growing all the time and is now quite extensive. Each stock in the universe has to apply some form of ethical screening, sustainability criteria or to be classified under one of our social or environmental themes. Most notably it does not include funds that only consider how companies operate and not what they do. This is because we believe that what a company does is just as important as how it does it.selection criteria for universe

Investments cover a range of assets including:

Equities - ethical funds and direct equities

Fixed Interest – ethical funds and direct bonds

Infrastructure – funds of social and environmental infrastructure

Real Estate – thematic funds, REITs and investment companies

Impact Investments – funds not listed on a recognised stock market

Read more about the 3D investment universe and strategy

Can a tobacco company really be socially responsible?  What a company does is just as important as how it does it.

Selection Criteria

Before conducting detailed research, we compile a shortlist of funds and stocks. This is based on a set of carefully chosen, objective criteria. Some criteria apply to all funds and others are specific to a given asset class. Not all of the criteria need necessarily be met, but there has to be a compensating reason for inclusion if the target is not achieved. For example, we may consider new funds if there is a compelling reason to do so and there is a reason to be confident in the fund management. Overall, we look for funds that we regard as ‘best in sector’.

Read more about our selection criteria and process

Due diligence

Once funds have been selected for the shortlist, they undergo more extensive due diligence. This involves rigorous analysis of the underlying portfolios, typically rechecking the underlying portfolios as for the short-listing and then doing additional analysis. This includes the following:

Identification of ethical issues

Assessment of financial track record

Ethical classification of holdings

Quality of SRI management

Risk analysis

Degree of transparency

Find out more about our due diligence process

3D Ratings

We rate funds according to ethical suitability, risk, social responsibility capability and methodology, social impact and financial record.  These ratings are determined by reference to a clear set of objective criteria which we apply to each fund under review.  All holdings in each fund are analysed to ensure that our ethical ratings are accurate.  We also give an overall rating for each fund, highlighting those that score the best in their sector.  This rating is based on both social and financial criteria, since both are important so socially motivated investors.

View the 3D Investing objective criteria for rating funds

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The information in this website is aimed at UK Investment Professionals (i.e. regulated firms) only. Any persons who do not fall within the definition of Investment Professional should not use or rely on the information in this website and should seek professional advice regarding their investments.