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Are you an investor that would like to know their money is doing some good towards securing a sustainable future? Would you like to be “responsible” in your investment selection? Ethical investing is becoming a popular, viable and profitable option with good returns and reasonable fees.
What it means to be an ethical investor
In the past, many investors wanted to have a social and environmental conscience when choosing where to place their money, however in the end feared losing out financially.
This is changing somewhat and investors are learning that it is entirely possible to couple ethical investing with high returns.
63% of British Investors surveyed by YouGov, as part of National Ethical Investment Week, said they would want to be offered ethical options when selecting their investment portfolio.
Ethical, responsible, social and environmental investments
The idea of ethical investing, or “socially responsible investing” (SRI) has been around for over 30 years.
It simply involves investors being given the opportunity to combine their ethical values into the decision they make regarding their investment portfolio.
If you go down the ethical investment route, your fund manager will filter out and avoid investment into companies that are associated with negative areas and industries, such as:
- tobacco and alcohol production
- oppressive regimes
- gambling
- fossil fuels
- nuclear weapons, and
- those businesses with poor employment practices
Following, they will filter in companies that are associated with positive industries, such as:
- sustainable forestry
- provision of social housing
- animal welfare
- energy conservation
- renewable energy
- those businesses that have a solid equal opportunities policy and,
- those that are open about their activities
Can you profit from ethical investing?
It was often a concern from investors that having a social conscience, whilst seeking high returns on investments, wasn’t an option, and many investors subsequently shied away.
In recent years though it is proving to be a profitable way for responsible investors to gain a return whilst knowing that their money is driving forward positive and sustainable businesses.
Fees for many Ethical and SRI funds are no higher than a conventional fund, making ethical investing a viable option for many investors.
In fact, a study by Eurosif (2014), showed that Sustainable and Responsible Investment strategies are growing, broadly faster than European asset management options.
So, if you are an investor wondering where your next move could be, then it is worth exploring the options with ethical investment.
That way you can rest your head on your pillow knowing that you are contributing to developing a more sustainable economy, whilst not ignoring financial sense.
Read more of Darren’s monthly features on topical financial and investment issues:
- August 2016 – Take a step back to take two steps forward
- July 2016 – Why don’t doctors & dentists focus on retirement planning?
- June 2016 – What my client’s are asking about Brexit
Need help with investment planning? Speak to Darren
Dental & Medical Financial Services are specialists in helping doctors and dentists with their investment planning. Call to speak with Darren.
Tel: 01403 780 770