If you are passionate about helping to do good in the world and at the same time want to make your money grow, this article will explain how to make ethical investments.
So what do we mean by ethical investments? Well ethical investing is the same as any other type of investment. It just means you are choosing companies, either directly or indirectly (through an investment manager), that make a difference in areas that are important to you. As well as being called ethical investments they are also sometimes known as socially responsible investments.
Some people may choose to invest in companies that are making a real difference towards a sustainable future for the world. This could include a focus on renewable energy, recycling or electric cars. Investing this type of way is called ‘Positive Screening’. Meaning your are seeking out companies trying to make a positive difference.
The alternative way to make ethical investments is to avoid companies that may be considered irresponsible. Companies that may be involved in the production of weapons, animal testing or pornography. This is called ‘Negative Screening’.
If you are unsure on exactly which area you want to focus on you don’t have to make a choice between positive and negative screening as some investment managers will do both and choose the appropriate companies for you.
According to the Good Money Week website there are now over 80 UK investment funds to choose from which invest in all different investment asset types e.g. companies, bonds, income and property.
Do ethical investments cost any more?
The process is no different to investing in non ethical investments. There are expensive and cheap investment fund managers so your research process should be no different.
Remember higher costs don’t always equal higher performance when it comes to investing, in fact it’s usually quite the opposite!
Have ethical investments performed well?
There is no evidence to show that ethical investments underperform non ethical investments. In fact when you think about it, companies that are involved in areas such as renewable energy are likely to be at the cutting edge of future technologies with significant opportunities to grow and deliver investment returns. Although there is no guarantee of course.
If you are interested in making your money grow by making ethical investments then please get in touch with us. We are able to offer a range of ethical solutions that suit investors looking for companies shaping our future and also solutions that avoid companies considered damaging to our world. Each solution can be adapted to the level of risk you are comfortable taking.
We can offer an hour of our time over coffee to discuss your requirements and point you in the right direction. This is at our expense and there is no obligation to proceed with anything. We can come to you at a time and place that is convenient for you. So you really have nothing to lose.
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.