Amity Insight The hard truth about soft commodities

This is for professional advisers only. This material is not suitable for retail investors who should not rely upon it.
1 Amity Insight January 2014

Soft Commodities: the Invisible Yarn that Binds the World

By Neville White Senior Socially Responsible Investment Analyst This Amity Insight focuses on one of the key components of the global economy: soft commodities. Recently, Tesco publicly acknowledged that 28,500 tonnes of food within its supply chain went to waste, in production, in distribution, in stores and in consumer homes. It was a revealing statement that helped throw a spotlight on the critical, but slightly mysterious, way in which food is delivered to our supermarket shelves and often wasted. Tesco revealed that between production and consumption, nearly 40% of production ends in the bin including 68% of all bagged salads and 20% of all bananas.1 This is consistent with US gures that suggest as much as 40% of food produced is never eaten, wasting $165bn of edible food each year.2 This Amity Insight examines how soft commodities are produced and traded. Which powerful organisations dominate and control the global trade in raw commodities coffee, cocoa, palm, sugar, cotton etc. and what, if any, are the ethical issues responsible investors need to be aware of. We also take a brief look into the exotic history of trading, and prole some supply chain case studies sugar, coffee and cotton to show just how complex they are. In our Amity Insight Hungry Planet we illustrated how the pressure is on to feed an expanding population forecast to hit 7bn by 2050.3 Key to meeting this demand will be delivering increasing efciencies throughout the supply chain and eradicating the levels of waste hinted at by Tesco. We therefore examine how some companies are taking control of the supply chain, eliminating the need for complex arrangements with middlemen and sourcing direct from farmers.

2 Amity Insight January 2014

A Short History of Commodity Trading

The earliest evidence for the trade in commodities can be traced to ancient China and Sumer (Southern Mesopotamia). The Sumerians rst used tokens sealed in clay vessels to represent items promised, whilst Japanese traders issued notes to raise funds to offset seasonal availability of rice. In time these embryonic mechanisms became a standard, understood form of currency. Commodity trading began in earnest in the 17th century as part of the great age of maritime discovery and exploration. The sea route to India brought exotic goods to receptive European markets, whilst the spice trade brought vast wealth to the Spanish empire. Over time, regulation was introduced to control supply, for instance crown-xed pricing in Spain that regulated trade in pepper, and the establishing of the East India Company by Royal Charter in 1600, with its exclusive right to trade in cotton, silks, indigo, dye, salt and opium.
East India House c.1800, painted by Thomas Malton

Commodities Make the News

Whilst the trade in commodities may not be as newsworthy on a day-to-day basis as other business events, market shocks still make the news, given the importance of commodities in everyday life. Soft commodities are prone to price volatility owing to climatic events, disease and poor harvests. A poor harvest will result in supply shortages and consequent increases in the price of the raw material that goes into food production. When supermarkets raise prices, it is usually to reect the increase in the cost of raw materials. Traded commodities are usually dened as either hard or soft. This Amity Insight is concerned only with soft commodities, representing the major agricultural (and cattle) futures markets corn, wheat, soya, cocoa, coffee, sugar, palm and cotton. Hard commodities include energy (oil, gas, ethanol, uranium), base metals (aluminium, copper, nickel, tin, lead, zinc), precious metals (gold, silver, palladium, platinum) and bulk commodities (iron, coal).

Amity Insight January 2014 3

How Commodities are Traded

Commodities are goods that have a price wherever they are traded. They are the building blocks of the global economy and the invisible yarn that binds the world. A commodities market facilitates trading in each commodity in one of three ways:
n Spot n Some n Some

commodities are not abundant, therefore trading may become illiquid and volatile commodities may have synthetic or man-made alternatives (e.g. sugar) consumption and production may be at a variance, causing price shocks.

market where commodities are bought and sold for immediate delivery market where an obligation to buy or sell at a given price in the future is agreed market where an option to buy or sell is purchased or sold.

n Historical

n Futures

n Options

To be traded, commodities generally meet standard criteria of tradability, deliverability and liquidity. Unlike the energy and metals market, agricultural soft commodities can be more price-volatile. This is because:
n Often,

the largest reserves are in politically volatile territories commodities are susceptible to climate, environmental impact and perishability

n Agricultural

Commodities are principally traded in Chicago, New York and London, although Londons dominance is largely restricted to minerals and metals. Five of the top ten global commodity exchanges are located in the USA. However, the majority of commodity traders operate from Switzerland. The principal purpose of the exchange is to regulate the market in that commodity. Commodity exchanges operate in a similar way to the pre-Big Bang stock exchange in London, with most exchanges allowing traders to exchange futures contracts, incorporating sell dates and an agreed price. Commodities are most frequently traded in bulk on the Chicago exchanges (CME and CBOT); however, they may also be sold directly by a commodity trading company to a processor-manufacturer.

Commodity Case Study: Sugar

4 Sugar is unusual Sugar is traded in contract sizes of 50 long tons (112,000lbs) with futures contracts issued quarterly. as it faces enormous competition from synthetic and articial sweeteners e.g. corn syrup. Sugar is produced in 120 countries (25% from Brazil alone), on 31m HA of land;5 other key producing countries are China, India and Thailand. Sugar is one of three agricultural commodities most responsible for driving competition for land in developing countries, and has been blamed by agencies such as Oxfam for fuelling land grabs. Global production now exceeds 165m 6 tonnes5 worth $47bn per annum. Sugar is a high-yielding crop and less susceptible to climate volatility than equivalent harvested crops. In the UK, sugar beet is grown rather than the more familiar cane (80% of supply). Consumption has 6 increased from 90m tonnes in 1980 to about 165m tonnes5 and is set to grow by a further 20% by 2020.

4 Amity Insight January 2014

Illustrating Supply Chain Complexity: Coffee

Many of us enjoy a morning cappuccino; last year in the UK we spent 831m on in-home coffee,7 consuming 500g of coffee per person per year.8 Sales are estimated to top 1.1bn and 61m kg in 8 8 2013. In the USA, the worlds largest consumer of coffee, more than 350m cups are drunk every day. But how many of us stop to think about how it arrives on our shores and in our favourite coffee shop? Coffee has one of the most complex supply chains of any commodity, and is the most valuable. 90% of production is 10 in the developing world,9 with 80% grown by small farmers. Over 60m people worldwide are estimated to rely on coffee production for all or part of their livelihood;10 in Brazil alone coffee supports 5m farmers harvesting 3bn coffee plants annually.8 Global production stands at 120m kilo bags, grown 8 predominantly in Brazil, Vietnam, Indonesia and Colombia. The supply chain typically involves producers, middlemen, exporters, importers, roasters and retailers. Middlemen buy direct from small farmers, with green coffee typically purchased by importers from exporters, 75% of which 11 is handled from Switzerland. Roasters such as Nestl rely on importers that hold large inventory, drizzling the commodity into the market to maintain price. The diffuse, extended supply chain illustrates how far the ultimate consumer is divorced from production. Growers have little capital to invest, whilst small farmers may be at the mercy of spot pricing. Without investment, labour practices may be poor or even harmful. Poverty remains an issue for a typical commodity supply chain. This is why we are seeing more direct control of supply chains by roasters; investment in husbandry and labour practices has led to higher yield, whilst the Fairtrade mark has had a positive impact on alleviating poverty. Adopting sustainable farming practices in Vietnam has boosted production among individual farmers by 10% and 12 incomes by 30% on average. However, certied production is still a work in progress as we shall see later on.

The Coffee Supply Chain

The coffee bush Coffee grows in tropical countries, near the equator. Coffee cherries, the fruit of the coffee bush, take about ten months to ripen, and are picked when they are red. Each cherry contains two green beans. Coffee is grown mainly by families on small farms. The cherries are usually picked by hand, because they dont all ripen at the same time. Processing After picking, the coffee cherries have to be processed in order to remove the outer husk. Sometimes they are dried in the sun, and sometimes machines are used to dry them. The coffee is then fed through hulling machines in order to remove the dried husk and the parchment (the skin which covers the bean). If they have the right facilities, coffee farmers process the coffee themselves. Often they sell it to traders or mill owners to be processed. Sorting, grading and packing for export The green beans are sorted (by hand or machine) into different sizes. Beans that are the wrong size or colour, or those that havent been properly hulled, are removed. The sorted beans are packed into bags and transported to the port. Shipping The bags of beans are shipped to the country where they will be roasted and blended to give them a good taste. Dealers Dealers buy the beans from the coffee exporters and sell them on to the roasters or coffee companies. These dealers work in stock exchanges in New York and London. Roasters These are the big coffee companies (such as Nestl and Procter & Gamble) which roast the green beans in order to turn them into coffee we can drink. They blend and package the coffee, advertise it and sell it to shops, restaurants, cafs and wholesalers. Supermarkets and shops Sell coffee to customers for home use. Coffee shops, restaurants and cafs Sell coffee to customers to drink.

Amity Insight January 2014 5

The Modern Commodity Trade

Commodity trading has come to dominate world trade, making up 33% of world trade volumes (hard and soft) and 70% of world maritime cargo dedicated to shipping 13 commodities. Soft commodities account for approximately 13 5% of world trade and 7% of shipped cargo.
Share of commodity trading in world trade in 2009 MONETARY
31
31

Each commodity is grown, processed and sold into the market differently, but each commodity is typically controlled by a small number of global traders, integrating buying, freight, and nancial futures trading. The top ten global commodity trading rms earned $1.1trn in revenues in 2012, with the top 14 ve earning $629bn, rivalling the largest but far better known nancial institutions. To the average person, these companies are largely unknown and invisible and yet by and large they control global food and feed supply. The most signicant soft commodity traders include:

Various products
Various products

14% Energy
14% Energy Commodities 24 5% Metals

11
11 Chemical products

Chemical products Commodities

24 5% Metals 5% Agricultural products

Machinery and vehicles

Machinery and vehicles

5% Agricultural products

34
34

Share of commodity trading in world trade in 2009

Soft commodity trading is dominated by the so-called ABCD Group of ADM, Bunge, Cargill and Dreyfus. Archer Daniels 11 Midland (ADM), founded in 1902 and listed on the NYSE, Various bulk materials 11 8 Various bulk materials 8 4 4 is one of the Global 10 soft commodity traders with revenues 9 20 9 of $90bn in 2012.15 ADM has signicant businesses in grain, 14 20 14 Total Commodities 70 Total oilseed, palm and cocoa, supplying and trading 16% of world Containers Commodities 70 11 Containers 11 3 4 1 3 cocoa production.15 ADM is typical in having two divisions: 3 4 1 3 12 12 trading and processing. It therefore buys, processes (or renes) General cargo, ro-ro 3% Metals and minerals 20% Crude oil and then trades the raw product into the market. ADM is a General cargo, ro-ro 3% Metals and minerals 20% Crude oil 1% Bauxite/alumina 11% Oil products 1% Bauxite/alumina 11% Oil products 4% Grain 8% Natural gas (LNG) leading manufacturer of raw vegetable oils, corn sweeteners, 4% Grain 8% Natural gas (LNG) 3% Additional agricultural 9% Coal 3% Additional agricultural commodities 9% Coal 11% Iron ore commodities 11% Iron ore biofuels, our and feedstuffs, illustrating the breadth and reach of a modern global trader. ADM, like many of its peers, is an integrated giant, combining nancial futures, brokerage, Whilst there are commodity trading hubs in the USA, Europe shipping, risk management and captive insurance as well. and Asia, Switzerland dominates the physical handling of soft
WEIGHT Refers to ocean freight (80-90% of world trade)

commodities; for instance, Geneva is the global centre for grain, coffee and sugar trading.

Global Commodity Hubs

London Chicago New York Houston

Amsterdam Geneva Shanghai Hong Kong

The surge in prots illustrates the necessity of closing the huge transparency gap of the commodities trading industry. The industry right now is a black hole. Oliver Classen, The Berne Declaration

Singapore

6 Amity Insight January 2014

Modern Commodity Traders: the Ethical Issues

These few global trading giants are remote and largely invisible from public scrutiny, and yet they wield great power by controlling the market in the raw goods and materials the world relies on. Eleven of the top 20 global players are not listed, such as Cargill of the USA, founded in 1865, and the largest private company in the USA by revenues. Indeed, if it were listed, such is Cargills size, it would rank ninth in the Fortune 500 16 with revenues of $136.7bn. Criticism of trading companies isnt just about their size or lack of transparency. Most have been dogged by charges of poor environmental management, pollution, deforestation, and complicity in human rights violations as a result of their high impact. In particular, traders tend, by their nature, to do business in countries with very poor human rights records. Their size and reach has also been criticised for supporting market price speculation (e.g. by stockpiling), which can then articially distort food or raw material prices. For instance, in 2012 Louis Dreyfus was sued by a senior trader at rival house, Glencore, for allegedly illegally cornering the cotton market as prices fell. In a very high-prole law suit, the trader accused Louis Dreyfus of breaking anti-trust law by articially inating prices in cotton futures, citing monopoly power and collusion. The suit followed cotton prices spiralling to levels not seen since the American Civil War in 1865, followed by a crash that saw them halve. Market manipulation is notoriously hard to prove, and intra-trading disputes between houses in the tight-knit commodity markets are rare. The opacity of the trade nevertheless raises the question of just how markets work, whether they are and can be manipulated by a handful of global titans, and the ethical implications for the poorest as a result. The sector is unusual in being almost wholly unregulated; the key tax domicile is Switzerland, operating under a typical tax rate of 5-15%17 (compared to 30-45% for the oil majors), with the industry consequently dogged by charges of tax avoidance and poor corporate transparency.

Amity Insight January 2014 7

The Commodities Giants with Revenues Larger than Some Countries GDPs
Commodity trading rms come in all shapes and sizes, but the top companies are giants. In fact, many earn revenues equal in size to the GDP of entire countries. Below is a comparison between the revenue of ve of the top ten global commodity trading rms and the GDP of ve economies.

GDP (2012)
Founded: 1966 HQ: Geneva, Switzerland Employs: 5,000 Operations: 30 countries

Revenues: $303bn (2012)

Malaysia: $300.6bn

Founded: 1926/1974 HQ: Baar, Switzerland Employs: 190,000 Operations: 50 countries

Revenues: $236bn (2012)

Finland: $244.3bn

Founded: 1865 HQ: Minneapolis, USA Employs: 142,000 Operations: 67 countries

Revenues: $136.7bn (2013)

Hungary: $124bn

Founded: 1987 HQ: Hong Kong Employs: 15,000 Operations: 140 countries

Revenues: $94bn (2012)

Morocco: $94.8bn

Founded: 1902 HQ: Decatur, USA Employs: 31,000 Operations: 140 countries

Revenues: $90.6bn (2012)

Slovakia: $90.7bn

8 Amity Insight January 2014

Amity Insight January 2014 9

Soft Commodity Case Study: Cotton

Cotton is a eld crop grown widely in the USA, China, India, Brazil and West Africa. It is produced in two types: long-staple (for high-quality textiles) and short-staple (industrial textiles). The 12 largest producing countries constitute 91% of world production, with the top three (China, India and the USA) producing over 60%.18 Supply and demand are nely balanced, as cotton is a fairly predictable cash crop supplying one third of global bre demand. It is believed to support up to 300m livelihoods worldwide,19 for instance in Mali, cotton represents 8% of national GDP and supports 40% of the population.20 It is also grown and exported by high-risk countries such as Sudan and Uzbekistan.

J Sainsbury has been involved with the Better Cotton Initiative since 2010 and collaborates with partners on sourcing cotton more sustainably. Sainsbury has set an ambitious target to source all its key raw materials and commodities sustainably to an independent standard by 2020, with its top 35 raw materials subject to sourcing plans in development.

Its school uniform range has now moved entirely to BCI sourced cotton, saving over 1m cubic metres of process water. Its target is for 20% of Sainsburys cotton footprint to be sustainable by autumn 2014, driven by BCI partnerships.
www.j-sainsbury.co.uk/media/1790641/20x20_brochure_2013.pdf

10 Amity Insight January 2014

Sustainable Cotton
Cotton has a reputation for being an unsustainable crop with its excessive use of water, chemicals and associations with forced and child labour. Water use can exceed 10,000 litres to produce 1kg of raw cotton;19 in areas of shortage and scarcity, excessive drawdown has had a devastating effect on communities and local livelihoods (e.g. former shing communities in Uzbekistan reduced to desert after water supply diversion for cotton elds). In India, 5% of land is given over to cotton, but it consumes 21 54% of all the sub-continents pesticide use. So cotton, vital to the global economy, is a cash crop with substantial risks attached owing to land, community and water pressures. The Uzbek cotton industry has been convulsed by child labour allegations, initiating a wide-reaching ban on sourcing Uzbek cotton, and giving rise to greater interest in corporate responsibility and sustainability initiatives. The Better Cotton Initiative is a multi-stakeholder group focused on six basic principles for better cotton (limiting pesticide use; water efciency; healthy soil; biodiversity protection; bre quality; and working conditions). Supporting retailers include H&M, M&S, Adidas, Tesco, J Sainsbury and Walmart. In 2012-13, 220,000 farmers took part in better cotton projects on 683,000HA, producing 623,000MT of better cotton or 10% of world consumption.22 In India, better cotton farmers typically use 20% less water and 40% less 22 pesticide. The global organic cotton market now stands at an impressive $7.4bn.23 Whilst conventional cotton remains at the heart of the chain, poor sustainability has forced business and retail leaders to take increasing control of parts of the supply chain to improve the chain of custody. This phenomenon has been repeated across other commodity supply chains, such as cocoa (see Ecclesiasticals Amity Insight The Bitter Sweet Side of Cocoa [2008] and the Cocoa Report [2011]), and palm oil (see IFA Expert Brieng Can You Invest Responsibly in Palm Oil? [2011]). Companies such as Unilever and M&S have committed to source only sustainable palm oil by 2015,24 whilst in cocoa, leading confectionery manufacturers (Mondelez International, Nestl, Mars) have taken control of parts of the supply chain by sourcing direct from farmers and are having a dramatic impact on improved quality, yield and health & safety practices.

Global Retail Sales of Organic Cotton Products $bn 10 8 6 4 2

2007

2008

2009

2010

2011

2012

M&S has a target under Plan A to source 25% sustainable cotton by 2015, and 50% by 2020. Results have been impressive, with 11% sustainable cotton achieved across its ranges from Fairtrade, organic, recycled or better cotton compared to just 3.8% in 2011.

In Kita, Mali, the cotton producers co-operative from whom M&S sources cotton has used the Fairtrade premium paid (this is in addition to the normal Fairtrade price premium), to build a block of two classrooms, with a further two planned next year. This achievement has persuaded the Malian government to invest in schools in the region. Fairtrade cotton in Mali is also empowering women at every stage of the production and process cycle.
http://plana.marksandspencer.com

Amity Insight January 2014 11

Producing Sustainably: Nestl

From a producer-processor perspective, commodity supply chain risk is a pre-eminent consideration operationally as well as in a reputational context. Companies are increasingly taking control of their supply chain sourcing for ethical and wider sustainability reasons. Nestl is the worlds largest food manufacturer by revenues, with 29 brands commanding sales 25 in excess of $1bn. With confectionery, coffee, cereals and dairy being key product segments, Nestl is a global buyer of soft commodities, particularly:
n Wheat n Cocoa n Coffee n Palm oil n Milk n Sugar n Hazelnuts

The company has now established responsible sourcing guidelines across 12 key commodities, with Tier 1 suppliers audited against their supplier code requirements. Traceability is still a challenge, but programmes are in place where the commodity is not sourced directly from the farm. All direct sourcing (and this is increasing) is monitored via a farmer connect programme, designed to ensure responsibility, sustainability and product improvement. The direction of travel in commodity sourcing is instructive; the traditional model of sourcing from traders on the commodity market is easing in favour of direct relationships with growers and partners. The Nescaf Plan aims to double the amount of sustainably sourced coffee by 2015; direct purchases of coffee (eliminating buyers and traders) will reach 90,000 tonnes by 2020.25 The Nestl Cocoa Plan follows in the wake of allegations of child labour and dangerous practices on cocoa plantations in Cte dIvoire. 11% of Nestl cocoa is now sourced direct.25

In 2012, Nestl sourced 22.47m tonnes of raw commodities.25 Nestl is typical of many of the global food and household goods producers in beginning to take ownership of the supply chain in order to become an agent of change; it has committed to a number of sustainability initiatives across a range of commodities. In particular, Nestl is working directly with over 690,000 farmers, with 273,000 receiving training in plant science and agronomy in 2012.25 Training, which is vital to improve yield efciency, took the form of conservation, water use, general husbandry and environmental science.

12 Amity Insight January 2014

Amity Insight January 2014 13

View from the Top

Commodities have come to dominate global trade; they represent 25% of all trade and 65% of cargo trafc. Despite their signicance, commodity trading remains opaque and elusive. As this Amity Insight has shown, modern supply chains are complex and extensive, putting a barrier between the growerproducer and the ultimate customer(s). The reality is that the bulk of commodities are controlled by a handful of global companies, over half of them unlisted, and therefore not subject to normal corporate transparency. Trading can be highly speculative, and potentially manipulative given the lack of regulatory oversight. Speculation and stockpiling can, in extreme cases, increase price and threaten food security. There are clearly many ethical issues at the heart of a process that controls global food supply, and which does not necessarily act in the economic interests of farmer-producers. These issues are driving change. Manufacturers, in the wake of allegations about poor practices, are taking more control and buying direct. Only they, rather than the traders, can be the agents of change that puts sustainability and responsibility at the heart of commodity sourcing. We do not see, at least in the short to medium term, any change in the balance of power; but the work being undertaken by global manufacturers, processors and retailers is rewriting the way raw materials are bought and traded. The ethical dilemmas surrounding the yarn that binds the world are challenging, and range from poor labour practices to tax transparency. We see investment in soft commodity trading as problematic owing to the fundamental model that disconnects the raw material from the wider beneciaries growers and customers. To that end, we engage with industry to encourage greater scrutiny of supply chains and better business practices, whilst looking for value via end-users, manufacturers of synthetic alternatives, logistics and transport. Neville White, Senior Socially Responsible Investment Analyst

Sources:
1 Tesco & Society Using our scale for good 2013/14. www.tescoplc.com/les/pdf/reports/ tesco_and_society_2013-14_halfyear_summary. pdf 2 NRDC www.nrdc.org/food/les/wasted-food-ip. pdf 3 Ecclesiastical Investment Management: Hungry Planet, Food: the search for sustainable yield. www.ecclesiastical.com/Images/Amity%20 Insight%20-%20Hungry%20Planet.pdf 4 CME Group (Chicago Mercantile Exchange) 5 S&D Groupe Sucres et Denres www.sucden. com/statistics/1_world-sugar-production 6 Oxfam Nothing sweet about it: How sugar fuels land grabs 2013 www.oxfam.org/sites/www. oxfam.org/les/nothingsweetaboutitmediabriefembargoed2october2013.pdf 7 www.fairtrade.org.uk/includes/documents/ cm_docs/2012/F/FT_Coffee_Report_May2012.pdf 8 www.realcoffee.co.uk/coffee-encyclopedia/ trivia/growing-facts/ 9 The Latte Revolution? Regulation, Markets and Consumption in the Global Coffee Chain 10 Coffee: The Supply Chain Times/Nestl www. businesscasestudies.co.uk 11 www.tagesanzeiger.ch/wirtschaft/unternehmenund-konjunktur/Die-Schweiz-handelt-denKaffee-fuer-die-Welt/story/21879629 12 www.bloomberg.com/news/2013-11-24/ sustainable-coffee-means-higher-yield-forvietnam-farmers.html 13 http://unctad.org/en/pages/ InformationNoteDetails. aspx?OriginalVersionID=38 14 www.businessinsider.com/presenting-the-worlds16-largest-commodity-traders-2011-10 15 www.adm.com 16 www.businessinsider.com/presenting-the-worlds16-largest-commodity-traders-2011-10#3cargill-minneapolis-minnesota-14 17 www.bloomberg.com/news/2013-03-27/ swiss-reject-tougher-regulation-of-commoditiestrading.html 18 Index mundi www.indexmundi.com/ 19 Better Cotton Initiative http://bettercotton.org/ about-bci/why-a-bci/ 20 Fairtrade Foundation www.fairtrade.org.uk 21 www.globecot.co.in/organic/new/intro_of_ organic_cotton.html 22 http://bettercotton.org/wp-content/ uploads/2013/10/2012-Harvest-Report_nal. pdf 23 Global Market Report on Sustainable Textiles 24 http://plana.marksandspencer.com/ 25 www.nestle.com

14 Amity Insight January 2014

Why Ecclesiastical?
n The backing of an award-winning team. n Over 25 years of experience of n A pride in our independent analysis. n Avoidance of companies materially

socially responsible investing (SRI).

n Funds that are both positively

Were not afraid to adopt contrarian positions and are in favour of long-term investment horizons.
n A consideration of the preservation

and negatively screened.

n A stable investment team with

a wealth of experience spanning many years.

n A comprehensive in-house

of capital as our primary responsibility, preferring absolute returns over relative performance.
n Fund Managers at Ecclesiastical are

involved in alcohol production, gambling operations, pornographic and violent material, tobacco production, testing animals for cosmetic or household products, supporting oppressive regimes or strategic weapon production.
n Actively seeking out companies with

SRI research function.

n An independent panel that reviews

unconstrained by rigid stock lists, permitting more exibility to take advantage of good-value opportunities as they present themselves.
n Decision-making for the long term,

investment decisions.
n A robust socially responsible

a record of involvement and good performance in terms of business practices, community relations, corporate governance, education, environmental management, healthcare, human rights, labour relations and urban regeneration.

investment process.

as frequent trading increases costs and decreases returns.

Meet the Team

Sue Round Head of Investments and Amity UK Fund Manager Sue Round is the UKs longest-serving retail SRI Fund Manager. With the benet of extensive experience, Sue has made the Amity UK Fund one of the leaders in the increasingly important socially responsible investment sector. Robin Hepworth Chief Investment Ofcer, Amity International Fund Manager and co-manager of the Amity Sterling Bond Fund Robin has been with Ecclesiastical for 24 years. He is recognised as one of Citywires top 10 Fund Managers of the past decade and is also a Trustnet Alpha Manager, placing him in the top 10% of all UK unit trust and OEIC managers. Chris Hiorns, CFA Amity European Fund Manager and co-manager of the Amity Sterling Bond Fund Chris started working for Ecclesiastical in 1996 and has been a CFA Charterholder since 2004. Andrew Jackson UK Equity Growth Fund Manager Andrew joined Ecclesiastical in 2003 and manages the UK Equity Growth Fund. His wealth of experience includes roles at Canada Life and Lloyds Investment Managers. Andrew is AAA-rated by Citywire. Neville White Senior Socially Responsible Investment Analyst Before joining Ecclesiastical in 2010, Neville was responsible for developing and managing global corporate governance proxy voting with CCLA Investment Management. Prior to this, he worked for the Church Commissioners, latterly as Secretary to the Church of Englands Ethical Investment Advisory Group. Ketan Patel, CFA Senior Socially Responsible Investment Analyst Ketan began his career at JP Morgan in 1998. He moved to Clerical Medical (now Insight Investment) as an Equity Analyst. Ketan has worked for Ecclesiastical for 10 years and is a CFA Charterholder.

Please note that past performance is not a reliable indicator of future results and that the value of investments can fall as well as rise and you may get back less than the amount invested. Source & Copyright: CITYWIRE. For the three years to 31st December 2013 based on risk-adjusted performance.

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