Moneybox taps swelling youth demand for ‘ethical’ investing

By Daniel Lanyon on Tuesday 14 May 2019

Savings and Investment

The app has launched a new fund helping customers invest more in line with their values. Moneybox will be the only provider to offer this fund in the UK.

Woke millennials want to invest ‘ethically' and so Moneybox has responded, launching a Socially Responsible portfolio option.

A compelling 92 per cent of young people, research from Old Mutual Investment Group found, believe that a company’s competitive edge and profitability will be enhanced by 'doing good'.

“Young people are changing the way we invest. Most of our customers are under 40 years old and they’ve been telling us they want a socially responsible investment option for some time,” said Ben Stanway, co-founder of Moneybox.

“Socially responsible practices are increasingly aligning with profitability for some of the world’s largest companies. Young people, in particular, want to be able to have more of a say in where their money goes, what their savings invest in, and the type of future this builds for them,” he added

The new portfolio, run by Old Mutual Investment Group, is exclusively available to Moneybox customers in the UK and tracks the MSCI World ESG Leaders Index and invests in a range of global large-cap companies “considering environmental, social and governance factors.”

Its performance since launching nearly five years ago is shown below against the MSCI World index, which just includes the largest publicly listed firms in the world, weighted by market cap.

Performance of indices since the launch of MSCI World ESG Leaders Index

Source: FE Analytics

The two indices have performed nearly identically over this period but their largest constituent companies are quite different. The regular MSCI Worlds index's top 10 largest holdings are Microsoft, Apple, Amazon, Facebook, JPMorgan Chase, Johnson & Johnson, Alphabet (Google), ExxonMobil and Nestle.

The MSCI ESG Leaders index's 10 largest constituents are Microsoft, Johnson & Johnson, Alphabet (Google), Procter & Gamble, Cisco Systems, Disney, Verizon and Mastercard.

Moneybox says the factors that decide inclusion in the index include how companies respond to climate change, treat their workers and manage their supply chains.

“By enabling customers to invest in companies with the highest ESG performance compared to their sector peers, the fund empowers customers to make a positive impact with their capital and influence ESG practices around the world,” Moneybox said in a press statement.

The Socially Responsible fund will be available across all the investment options offered by Moneybox. Ongoing fees for this fund will be slightly higher than for the standard global shares fund - 0.18 per cent compared to 0.12 per cent per year.

Moneybox was launched in August 2016 by Charlie Mortimer and Ben Stanway, and has 180,000 users, according to the firm. Prior to Moneybox, Stanway co-founded Bloom & Wild.

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