London, 3 March 2025 - Impact investor WHEB Asset Management LLP (WHEB) has this week informed investors it will remove the MSCI World Index as a benchmark for the FP WHEB Sustainability Impact Fund (the Fund).
The company has updated its prospectus to state: “The Fund is not managed with reference to, or constrained by, any benchmarks or indices, as the Authorised Corporate Director (FundRock) does not consider that there is a representative index or sector that can be accurately used as a comparator benchmark.”
The Fund’s investment strategy is focused on companies that have a positive impact as their products or services provide a solution to a sustainability problem. Due to this, the company has always made clear to its investors that most companies in traditional index benchmarks do not meet this definition, and therefore are excluded from the Fund’s investable universe, which typically overlaps with the MSCI World Index by only 15%.
WHEB excludes significant sectors of the economy which are considered either to have negative sustainability impacts, or no identifiable or measurable positive impact. This means that the Fund portfolio tends to be absent from significant sectors of traditional indices, such as financials and energy; and has significant bias towards other parts of the market, such as health and industrials. As a result, investment returns are likely to be different to those of a larger unscreened universe in any given time period.
There will be no change in the way the Fund is managed, only the way that performance data is presented.
In its public materials, such as factsheets and quarterly reports, WHEB will continue to show several comparisons to give context for returns and a comparison against other investments they might have chosen to make. These include the MSCI World Index to show what the investor might have earned if they had invested in a broad portfolio of global developed world equities. In addition, the company will show the Bloomberg UK Govt 5-10 yr Bond Index to show what the investor might earn if they had invested in UK Government Debt, and the SONIA cash interest rate as a proxy for what the investor might be able to earn for cash deposits.
George Latham, Managing Partner at WHEB, says: “We believe this change will enable us to have a richer and more constructive conversation with investors about the returns we achieve on their behalf, and provide better information and transparency.”
