What is Ethical Investment
Ethical Investment funds are designed for people who are a bit more discerning about what the monies they invest are being used for. Ethical funds have been around for over a century now and have traditionally been exclusionist funds, meaning if a company is involved with anything that they deem improper, it is wholly excluded. This process of screening companies is called 'Negative Screening'. This screening process can be used to omit companies who are involved in arms manufacture, tobacco products, pornography or the like. Alternatively, you may wish for a fund that screens out companies with a poor human rights record, or those who are highly pollutant. In short, virtually anything can be screened out through negative screening.
Modern ethical funds tend to adopt a 'Positive Screening' approach. There may be some industries that they will not touch at all, but funds that employ positive screening methods will look at companies that for example may have particularly good pollution management policies or are sourcing more power from alternative energy sources. Positive screening allows investment houses to still invest in industries that we may deem undesirable, but they will take a 'best of sector' approach and only invest in the companies that demonstrate that they are taking their environmental responsibilities seriously. By investing in a larger range of industries, positively screened funds tend to be able to provide comparable returns with the non-ethical funds within their sector.
Heritage Financial Services have offered ethical funds to our clients through our self-select ISAs, OEICs & Unit Trusts since we first started the website back in 2000. We’ve noticed an increasing number of people are concerned about where their monies are being invested as well as the potential return. It has taken us a little while but we are now pleased to offer the new Heritage Ethical Growth Portfolio. Roughly aligned with the Moderate Growth portfolio in terms of risk rating, the Ethical portfolio should provide a roughly commensurate return.
