What is Ethical Investment?

In a nutshell, ethical investment involves investing in companies with a social, moral or environmentally responsible agenda.

There are two fundamental strategies known as ‘negative’ and ‘positive’ investment to help guide investors. Positively screened portfolios invest in a broader range of industries that are managing their business in a responsible way. Negatively screened portfolios have much more rigid requirements and will exclude certain industries completely.

By asking you to complete an online questionnaire we’ll be able to advise you on the portfolio that most accurately reflects your values and concerns.

How is Ethical Investment Growing?

Ethical or socially responsible investment has been around since the early 80s. Over the last 30 years the market has continued to grow as businesses are under greater pressure to demonstrate social and environmental accountability.

In the US socially responsible investing is well established and has grown by more than 22% in the past two years alone. Now, roughly $1 of every $9 under professional management can be classified as a socially responsible investment.

We anticipate the UK to follow suit as a recent You Gov poll showed that more than 54 per cent of people interviewed wanted their investments to do good as well as make money. Through expertETHICAL, we want to help as many people as possible to invest in companies that share their values.

Source: FTSE4GOOD Global Index

How Successful are Ethical Funds?

From a purely financial point of view, ethical investment makes good sense. The FTSE4Good index, which screens out stocks in ‘non-ethical’ sectors, has beaten the all-share index over the past five years, returning 48 per cent versus 43 per cent.

What’s more, ethical investment can also help to ignite change on a broader scale. Businesses need investment to help them grow, so investing in those that make a positive impact on the world around them can be powerful.

The impact stretches even further too. As non-ethical companies see investors taking their money elsewhere, they’ll be under pressure to review the way they do business for the better.

Over the years, we’ve seen funds put pressure on companies to reduce their carbon emissions, to be more transparent in their clinical trials and review transparency in their supply chains. Money definitely talks.

Source: FTSE4GOOD Global Index

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