While each individual must determine what constitutes appropriate values and ethical conduct, some values seem to us to be universal, and we dedicate ourselves to adhering to these as we purse investment success for our clients.
When conducting investment analysis, we evaluate company managements to determine if they adhere—to the extent it is possible to ascertain—to an approach to business that reflects these values. Along the same vein, when it comes to evaluating companies and industries, we analyze each company's and industry's relative ethical "footprint." For example, some people consider the nuclear energy industry to represent a lack of values while others feel the same way about fossil fuels. But in a world in which energy consumption is a given, our analysis might weigh the relative positive and negative impacts of each industry in our pursuit of an investment in energy.
When we believe the values represented by a company and its management are inconsistent with our own values and those of virtually all of our clients, we refrain from making such an investment. Tobacco companies would be a perfect example (at least until research uncovers a previously-unknown health benefit of tobacco).
The values represented by many other companies and industries are often not so clear cut, with some people strongly believing a company to be unethical while others believe the opposite. Therefore, we offer clients the opportunity to list companies and industries they do not want to own, be if for social, moral, ethical, religious or other reasons (and they need not tell us the reason for their restriction). As "values" investing and "socially responsible" investing have become marketing tools for mutual fund companies and robo-advisers, we believe that our approach to "values investing" allows each client to feel confident about the values of their adviser and the composition of their portfolios, while still pursuing superior investment returns.