The term ‘ethical’ is often used as a catch-all to describe funds managed with social, environmental, or other responsible criteria in mind.
Investing ethically offers the possibility of taking advantage of good performance whilst also benefiting society. And it’s becoming more and more popular with investors of all ages.
But of course, ethics are personal. An industry that seems abhorrent to one person might seem like a necessary evil to others. Take pharmaceuticals. Some investors would avoid the industry because of moral objections to animal testing. Others suggest the work of pharmaceutical companies contributes to the development of society.
That’s why you’ll need to make sure your investment is consistent with your moral views before you invest. When giving advice we look at the approaches taken by a selection of funds whilst taking into account how much risk you want to take just as you would with any other type of investment.
Striking a balance between investing morally and delivering strong performance is no easy task.
We are also strong advocates of diversified investment, and it seems to us this should also apply to Ethical Investing. The principle of diversification is well documented elsewhere is these posts and should be fundamental in portfolio choice in our opinion.
As with any investment, make sure it fits your objectives and you are comfortable with the risks before investing. And if you are unsure, seek advice. Give us a call. We will be pleased to assist.