'Ethical Investments to Buy Our First Home'

Investor Views: Maths teacher Richard Swoboda and his wife have two main aims, to get on the property ladder and to fund a charity project

Emma Simon 1 September, 2021 | 11:56AM
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Richard Swoboda and his wife Staci hope their Isa investments will allow them to get on to the property ladder and also help with their animal rescue project.

Richard, who is 32 and works as a maths teacher, has been investing in Isas for about 10 years, although he only opened a Stocks & Shares Isa three years ago.

“I have saved into a cash Isa since I was 24. These savings helped to fund my wife and I through our Masters’ degrees and paid for part of our wedding.

“Now these short-term spending needs have been met, and we have paid off the rest of our wedding debt, we have become more focused on investing our money for the future with the aim of buying a house.”

The couple, who currently live in south-west London, say one of their main concerns has been to ensure these are ethical investments that align with their principles. Richard says: “In recent years we’ve been more conscious of our own impact on the environment, from consuming less meat to being more thoughtful consumers, and we want to make sure we’re putting our money where our mouth is when it comes to our investments. As keen animal activists, ensuring animal testing isn’t a part of any of our holdings has been a key concern.”

Three ESG Funds

With this in mind the couple invest in three ethical and sustainable funds within their Isa, which is held with Chelsea Financial Services.

Richard says: “The majority of our portfolio – around 60% – is invested in BMO Responsible Global Equity. The team uses an independent sustainability team to ensure standards are maintained, which we think is good practice and gives us more conviction with their decisions. This was our sole holding for the first year of investing while we built up a sum of money.”

This fund has a 4 Star Rating from Morningstar, reflecting its strong performance relative to peers in recent years. It also have a five globe rating for sustainability The fund invests in large companies from across the world and aims to select funds with higher environmental, social and governance ratings.

This focus on more ethically minded companies has not dented returns though. According to Morningstar data it is delivered annualised gains of 17.87% over the past five years.

Since then the couple have invested in two further funds, both of which are relatively new launches. This includes Rathbone Greenbank Global Sustainability and Ninety One Global Environment.

Richard says: “One of the exclusion criteria for the Rathbone fund is animal testing, which particularly stuck out when researching where to invest. We liked the Ninety One fund because it has a unique approach of only investing in companies that are contributing to the decarbonIsation of the world economy.”

The couple have their remaining funds split equally between these two funds. He adds:  “We’re not in a rush to buy a house as we’ve not settled on which part of the country we’d like to buy, so we’re comfortable investing 100% in equities, despite the higher level of risk.”

Multi-Asset Fund for a Junior Isa

Alongside this main Isa, the couple also contribute a monthly amount to a Junior Isa on behalf of their niece. “This is to hopefully help with any university fees in future. My wife and I are huge proponents of higher education and as the only member of my family to go to university it’s important to me that she knows she has that option in future.”

This fund is invested in Chelsea Managed Aggressive Growth fund, a multi-asset fund run by Chelsea Financial Services. He says: “We chose a multi-asset fund so we don’t need to worry about rebalancing her portfolio on a regular basis and can instead check in once a year. As the pot grows, we’ll look to diversify the portfolio with one or two further ethical funds.”

As well as being passionate about education, the couple are keen animal lovers and have two of their own dogs. They also foster ‘difficult’ rescue dogs to help ready them for adoption. Richard says: “My ultimate goal is to train dogs to be used in animal-assisted therapy, particularly for children with autism. This is a really expensive and time-consuming undertaking, so building a strong investment portfolio that allows us the flexibility to continue our passions is important.”

As they have only been investors for three years, Richard says they haven’t had any out and out disasters. But he says: “We had to learn to be patient and not make any rash decisions, particularly during the first part of the pandemic. We believe having a portfolio of 100% ethical investments helped us during the initial sell-off as well.”



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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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