Thoughts on Investing Ethically.

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.

Thoughts on Investing Ethically.

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.


Rising interest in ethical, and socially responsible investing

This year’s Good Money Week, which ran from September 29 to October 5, highlighted just how many asset management groups have widened their offering in the ethical, sustainable or socially responsible investing (SRI) space.

Initially it was thought that interest would mainly be among milennials.

What is clear, however, is that there is a growing interest among clients of all ages in ethical and sustainable approaches to investing.

The Schroders Global Investor Study 2018 reports that 56 per cent of UK investors have increased their allocation to sustainable investments in the past five years.

Jessica Ground, global head of stewardship at Schroders, admits: “Clearly, barriers still remain preventing investors from embracing this approach, highlighting that the availability, transparency and advice around these funds requires improving.”

ABFM as a Company have seen a considerable increase in the interest in Ethical and SRI investing over the last 3 or 4 years.  And by and large, despite misplaced concerns about returns, performance has been very acceptable.

The UKSIF Investment Conference

Had a great day last Monday when I attended the UKSIF Investment Conference in London.

One of the main points to come out throughout the day was the need for us to change from a Linear society to a Circular society, in other words the need to recycle.

I had never thought of putting it that way and feel it is more appealing than Recycling.

All in all, it was a worthwhile experience to hear the diverse views of analysts, researchers and advisers from both the UK and abroad.

Today’s UKSIF Investment Conference

I’m in London today and looking forward to attending the UKSIF (UK Sustainable Investment and Finance) Association’s annual conference.

Ethical, Sustainable Investment and Socially Responsible Investing has because more and more important to many people in recent years and I am hoping to increase my knowledge by my attendance and become more of an expert and the first port of call for people who want to invest in products that do not harm our planet and the people who populate it.

That includes YOU.

And remember when we say investments, we mean Pensions, as well as ISAs, OEICs (Open Ended Investment Companies), and ETFs (Electronically Traded Funds).

The conference is a whole day event and I’m sure it will prove beneficial both to myself and my clients for whom this aspect of Investment is important.

 

What is driving investor interest in Ethical Investing (Part 2)?

In my last blog I looked at the reasons why many people were becoming concerned about their Social and Ethical responsibilities.  Let’s move on…

 

For many years, the perception has been that there is a price to pay for taking social, environmental or ethical factors into account and that has dissuaded many from investing in this way.  It has also limited the number of advisers and discretionary fund managers (DFMs) promoting the area.

But this change in perception, added to a growing awareness that there is a need for a more socially and environmentally sustainable economic system (plastics being a case in point) has helped drive growth.

Shareholder influence

There is of course views that are a little more sceptical.  For example, Investment Association figures show ethical funds stand at £16.7bn in funds under management at the end of July, which represents a tiny 1.3 per cent share of the overall investment universe”.

While ethical consumerism has been on the rise, the trend has not been mirrored in the investment world, despite the best endeavours of advocates to raise awareness of ethically and environmentally screened funds.

Does that mean investors don’t care about issues like the damage being done to our oceans by plastic waste or climate change?, it is asked.

It would appear not as the outer investment markets are prepared to use shareholder influence to engage with companies on these matters.

There is also an assumption that these types of Ethical funds appeal more to millennials than other demographic groups. Millennials, those born between the early 1980s and early 1990s, are often said to be the driving force behind the increasing number of ethical and sustainable mandates launched by fund groups.

But others believe this generation cannot take all the credit.

I, personally, have noticed that there has been a significant shift across a much wider group of investors, both by age and type; from charities, private clients, pension funds and financial advisers and while there are suggestions that millennials are more interested in SRI investing, we are seeing interest in the area from a range of demographic groups.

We, specifically, are talking to all our clients about their choices in this area when making investment decisions, and this, we believe, is driving demand.

If you would like to have a talk with us about Ethical and Socially Responsible Investing, give us a call or drop us an email and we can have a chat over a coffee. (My treat!).