UBS and M&G ‘worst performers’ on responsible investment

UBS Global Asset Management and M&G have been named among the worst-performing fund houses in terms of transparency and responsible investment by ShareAction, the investor rights charity.

ShareAction ranked the 33 largest asset managers in the UK by examining to what extent they meet the responsible investment and transparency criteria set out by the UK’s stewardship code. All the asset managers examined, which collectively account for £13.8tn of assets, have signed up to the code.

The charity gave the fund houses a possible 143 points for full compliance. UBS and M&G scored just 29 and 26 points respectively, slightly more than Santander Asset Management (18 points), JO Hambro Capital Management (15 points) and Boston-based Wellington Management (12 points).

More than a third (36 per cent) of the asset managers examined did not disclose their conflicts of interest policy, despite the fact that this is one of the main requirements of the code, according to ShareAction. Such policies should cover issues including rules on gifts and entertainment, and personal account dealing by staff.

The charity also criticised the fact that the proportion of asset managers disclosing information on their voting and engagement activities at the companies they invest in has remained stagnant at 83 per cent since 2010.

“There is a risk that asset managers are becoming more skilled at marketing their responsible investment activities rather than improving the quality of activities themselves,” the charity said.

Catherine Howarth, chief executive of ShareAction, added: “Our survey blows the cover on a wide range of big names in asset management who still refuse to be transparent about how they invest clients’ money.”

Last month the Financial Reporting Council, which oversees the code, said that it would consider striking off signatories that enjoyed a reputational benefit from having signed up but do little to enact its guidance.

A spokesperson for M&G said: “The survey does not reflect the level of [our] activity or the seriousness with which we view [responsible investment]. M&G did not respond to the survey; had we done so, we would expect our score to have been far higher.”

A spokesperson for UBS, which also did not participate in the survey, added: “We are fully committed to the principles of the UK Stewardship Code and have a long tradition of dedicating significant effort to fulfilling our stewardship obligations.”

The top-ranked asset managers were Threadneedle (125 points), Aviva Investors (121 points), Jupiter (120 points), Hermes Investment Management (110.5 points) and Legal & General Investment Management (108.5 points).