Views on Ethical Investing

GBY

I plan to supplement my company pension by opening a S&S ISA. I'd like to invest £3000 into funds of medium risk via Hargreaves, then pay £50 into each fund on a monthly basis. I'm 36 so the money will be tied up for 20 years or so when I would look at moving it away from equities as retirement approaches.

Ethical funds are a priority and I accept these may not give the best returns as other funds owing to their limitations. However, I do believe this is an area that has potential as we need to look at cleaner ways of energy production, transport, production etc.

Funds I have narrowed down so far are:

Jupiter Ecology US, UK, Europe
Jupiter Environmental UK only
Henderson Global US, Japan

These are spread across various sectors and geographical areas so I consider them to be a good spread of risk.

I would be interested in views on these funds and opinions on ethcial funds in general particularly when environmental and ethical issues are more prevalent than ever.

gozomark

is the second one just a less diversified version of the first one ?

GBY

No, it does invest in different companies and countries. Is that what you meant?

elwy

I wanted to consider ethical funds for my portfolio but I've pretty much given up on the idea now. I thought that Jupiter Ecology looked like a good choice but be aware that HL does not give a full rebate of the initial charge for Jupiter Ecology, so it might work out to be an expensive choice. In the end
I found that I personally disagree with the policies of most ethical funds, since most of them are "dark green" and I would prefer a "light green" philosophy. I've yet to find a fund that claims to be "light green".

wriggly

Ethical funds use criteria which do not necessarily reflect your personal ethical views. Use your investments to make money, even if that means investing in guns and tobacco.

Then direct the "excess" earnings of your amoral(*) investments to the ethical causes you prefer by supporting charities and campaign groups as you see fit.

This is much more likely to achieve your aims.

(*) amoral = without regard to morals; as opposed to immoral = without morals

GBY

I'm not too bothered about alcohol and tobacco as it is the individual's choice to buy these. But I would hate to think my money was going directly towards the arms industry in particular through any fund I invest in.

Any supporters of these type of funds out there?

GBY

I mean of the ethical type of fund.

dunstonh

. I'd like to invest £3000 into funds of medium risk via Hargreaves,

Fair enough.

Funds I have narrowed down so far are:

Jupiter Ecology US, UK, Europe
Jupiter Environmental UK only
Henderson Global US, Japan

Which are all higher than medium risk. Mostly medium/High and High.

Before you do anything you need to really understand risk a bit more as a common mistake of newbie DIY investors is to invest above their risk profile.

mark13

How about JPM Natural Resources.

parcival

A couple of years ago we cashed in a £50k investment that was split over 5 different funds. By far the worst performer was the ethical fund (I think it was a Henderson Fund). Over 6 years it made not a penny whilst the best performer made around 80% profit over the 6 years.

Invest if you agree with the aims of the specific fund you are going for, otherwise forget ethical and go for profit.

wriggly

GBY wrote: »

I'm not too bothered about alcohol and tobacco as it is the individual's choice to buy these. But I would hate to think my money was going directly towards the arms industry in particular through any fund I invest in.

Well, if your fund invests in, say BAe, they don't actually receive any extra money. They received some quite some time back when they originally sold the shares.

On the other hand, by buying their shares (through a fund), you now get some of their ill-gotten gains in the form of dividends and can redistribute it to purposes you see to be more fit, whether that is Amnesty International or a Nintendo Wii.

The problem is that there are very few companies that are completely ethical. Mining companies provide jobs and infrastructure to developing countries, yet can be excluded from some ethical funds on environmental grounds. On the other hand, ethical funds rarely exclude financial firms, and they're currently looking the least ethical of the lot!