Investing against cancer

Written by Rebecca O'Connor on 3rd February 2016

This site is about being good and doing good with money; it’s World Cancer Day and currently, three members of my close family are being treated for cancer. And so I would like to address briefly what I think we can do with our money beyond charity giving to bring an end to the effects of cancer on all of our lives.

When we think about raising funds to fight cancer, we think of charity giving. People doing remarkable hikes or runs, glitzy fundraising events or school fairs. And this is all great and meaningful and inspiring.

What we don’t really think about is our investments and whether they too could support work on treatments and cures.

Investors DO think about not investing in tobacco. In fact, it’s the one negative screen (investment filter that weeds out unethical activities by type) that even people who really don’t care much for the notion of values-based investing, actually apply. Investing in tobacco does not sit well with many investors because we know that smoking causes cancer. It has been drummed into us for a very long time and many of us, no matter how libertarian, do not feel comfortable with making a profit from cigarettes.

But what of other cancer causing activities? Because there are lots. Alcohol has been linked with breast cancer; diesel fumes with lung cancer, while carbon dioxide emissions generally, being responsible for stratospheric ozone depletion, are ultimately to blame for a number of chronic health conditions, as well as breast, prostate and of course, skin cancer, according to the World Health Organisation.

And yet if we invest (and even if we don’t actively invest but have savings with a bank or in a workplace pension), much of our money will be going into companies that produce carbon emissions, diesel fumes or alcohol. In other words, into things that can cause or worsen, cancer. Yep, not what you want to hear.

On the whole, where we put our money and the things we care about are separate – segregated into different mental compartments because it is easier to manage them that way (as Barclays Wealth behavioural finance expert Greg Davies explains in this interview).

The consequence of this is that even if we care deeply about cancer, have lost loved ones and donate hundreds of pounds a year to cancer charities, it is possible that we are saving and investing in funds that support the very industries that are killing us.

Which leads me to the only investment with an anti-cancer agenda: the Battle Against Cancer Investment Trust (BACIT). What Thomas Henderson, Peter Hames and the directors are doing is really commendable – the fund managers don’t charge fees – no one is getting paid – and they are donating 1 per cent of the fund’s NAV (Net Asset Value) to various cancer research groups and a further 1 per cent to charities. It’s a good long term prospect for investors and it is regularly contributing to vital cancer research. Tick tick.

However, the funds that BACIT invests in have chunky stakes in industries that are known cancer causers. Polar Capital Japan Alpha, the fund’s biggest holding with 7.7% of the NAV, has a 3% share of Japan Heavy Industries, maker of Subaru, among other resource-dependent activities. BP, global polluter extraordinaire, is one of the biggest holdings of the Majedie UK Equity Fund, BACIT’s second biggest holding.

It’s not our wish to undermine what the fund is aiming to achieve – and it is very difficult to avoid carbon emissions totally, especially when investing in a diverse mix of funds, but there is a conflict between the fund’s mission to fund the fight against cancer and some of the companies it is invested in.

The great news is there are a surprising number of ways you can invest to beat cancer by picking even some mainstream funds.

And thanks to a surge in popularity of biotech and pharma stocks, some of the most popular retail funds in the UK have a decent amount of exposure to the drug developers and scientific researchers behind the therapies and treatments that might just beat cancer.

Take the Woodford Patient Capital Trust, for example. Not to be confused with the Woodford Equity Income Fund, which is the UK’s most popular retail fund and has a 5 per cent holding in British American Tobacco, the top eight stocks in the Trust are in the healthcare sector and 64 per cent of the fund in total is healthcare.

The second biggest holding of the Trust is a company called Immunocore, a clinical stage biotechnology company which is the culmination of decades of research and development around technology originally developed at Oxford University. The company operates in the fast evolving field of immuno-oncology and is developing drugs that target cancer cells and redirect the immune system to kill them. The Trust  also holds Proton Partners, a company specialising in Proton beam therapy, a less invasive alternative to radiotherapy in children and most recently bought a share of Inivata, a Cambridge-based company that uses a simple blood test – ciculating tumour DNA (ctDNA) analysis – to detect cancer.

Ethical funds that might not invest in companies actively fighting cancer but do screen out activities that are known or possible causes, are another thing to consider. The Fund EcoMarket is a tool which allows you to select different investment “types” from funds with a “socially responsible investment” (SRI) mandate, for example, ethically-balanced, strict ethical screens and socially focused. EdenTree Amity and Henderson Global Care Growth Fund are returned in results on this search.

Or you might prefer to create an anti-cancer element to your own portfolio, with individual stocks in companies developing new therapies or those that help deal with the causes, such as renewable energy companies by reducing carbon dioxide emissions, for example, always making sure to diversify.

If beating cancer is something you care about but all of the above sounds a little scary and hard work, then just remember to look at the fund holdings next time you do invest in something, keeping an eye out for companies that might be doing more harm than good in our collective fight against the disease. Most major fund platforms such as Hargreaves Lansdown list funds’ top ten holdings, at least.

Your savings can do good work here too. Yorkshire Building Society issues a popular Marie Curie bond (not currently offered) from time to time, and institutions such as Charity Bank and Ecology Building Society only do good things with your deposits.