Positive Pennine Investment Strategy and Process

The aim of the Positive Pennine Portfolios is to achieve capital growth over the longer term using a wide variety of investments that make a social or environmental difference. These are not traditional ethical portfolios, instead aiming to highlight ethical compromises from external and internal corporate governance. The goal is to engage investors with making a positive contribution to future generations with their money.

The investment process can be broken down as follows:

  • A universe of potential portfolio holdings is created by 3D Investing comprising of stocks that have some form of ethical screening, sustainability criteria or environmental themes.

  • Each holding is then rigorously tested for and ranked using such criteria as; ESG (Environmental, Social, and Good Corporate Governance); Positive social impact; transparency; and financial track record.
  • This universe is then allocated 3D star ratings to reflect their ranked criteria from 1 to 5 stars, with 5 being a real pioneer in the industry and 1 where the fund poses real concerns.

  • The universe, with star ratings, is passed to a separate, experienced portfolio manager.

  • The Portfolio Manager, separately researches the universe presented to him by 3D investing using a traditional efficient frontier modelling process. The holdings are chosen to maximise their impact rating, whilst also fitting with appropriate asset weightings for volatility ranges set by Pennine Wealth Solutions.
  • The portfolios are then back tested over a 20yr period to stress test the portfolios performance in various market conditions, and the result is a range of strategic models.

  • These strategic models are then overlaid with a tactical asset allocation view using multiple inputs such as third-party research, respected fund manager views, and industry knowledge.

  • The final result is a range of 7 portfolios suited to investors from medium to high risk tolerances, in the knowledge the portfolio manager will run the portfolios on the basis of a hard ceiling (must not go above a certain volatility) and a soft floor (happy to take less risk for the same equity market returns).

The Portfolio Performance Facts Sheets

Positive Pennine – Impact investing solutions
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