Aegon Ethical Equity Fund Class B - Accumulation (GBP)

The exclusionary approach adopted by the fund means around half of the largest 350 companies listed in the UK are not considered suitable investments for the fund.

The fund therefore has a long-term bias towards higher-risk small and medium-sized companies. These companies tend to rely more heavily on the health of the UK economy. This, combined with the fund's lack of exposure to industries like oil & gas and tobacco, means its performance can differ significantly to that of the index, as well as more conventional UK equity funds.

The fund aims to provide a combination of income and capital growth over the long term by investing in companies that meet its ethical criteria.

It invests in UK companies using an 'exclusions-based' approach, so it doesn’t invest in companies involved in activities deemed unethical. The UK stock market is filtered for these ‘sin stocks' by Aegon's ESG Research Team.

The screening process is kept separate from Ryan and the rest of her team, leaving them free to focus on stock selection and portfolio construction, and to provide some independence and credibility to the screening process. Ryan analyses stocks that come through this screening process aiming to invest in companies benefitting from structural changes in the economy.

The fund’s ethical screens are reviewed every two years following an investor survey. The most recent results in 2025 indicate continued support for the fund’s approach to exclusions, with some areas like nuclear showing interesting trends to watch in future surveys.

Below is a more detailed list of the companies that the fund won't invest in.

• Animal welfare - companies that provide animal testing services, make or sell animal-tested products, are involved in intensive farming, operate abattoirs or slaughterhouses or sell meat, poultry, fish or dairy

• Military - companies that make armaments, nuclear weapons or similar strategic products

• Nuclear power - companies that own or operate, nuclear facilities

• Environment - companies that excessively damage the environment, in breach of internationally recognised conventions on biodiversity or those engaged in energy intensive industries which are not tackling climate change

• Political donations - companies that have made political donations in excess of 1% of revenues in the past 12 months

• Gambling - companies with investments in betting shops, casinos or amusement arcades which account for more than 10% of their total business

• Alcohol - companies where more than 10% of their total business involves brewing, distillation or sale of alcohol

• Tobacco - companies where more than 5% of their business involves growing, processing or selling tobacco

• Pornography - companies that provide adult entertainment services

• Banks - corporate or international banks with exposure to large corporate or Third World debt

• Oppressive regimes - companies operating in countries with poor human rights records or with no established policies on human rights issues

An important part of the fund's investment process is then to meet with company management. These meetings allow Ryan and her team to build a deep understanding of each business, and the challenges and opportunities it has ahead. They will also consider how the stock’s valuation compares to what their analysis suggests it's worth, and how it’s been valued in the past.