Ethical S&S ISA advice please

thegentleway

A_T said:

thegentleway said:

Passive funds aren't that ethical. If you really want to invest ethically you should consider active funds.

there are plenty of ethical indexes tracked by funds e.g.:
Vanguard ESG Developed World All Cap Equity Index Fund which tracks the FTSE Developed All Cap ex Controversies/Non-Renewable Energy/Vice Products/Weapons Index; or
iShares MSCI World ESG Enhanced UCITS ETF USD which tracks the MSCI World ESG Enhanced Focus NET Index

Yes but screening is just applying broad-brush criteria... and is a rather lazy way to convince yourself your investments are ethical. Obviously, it depends what you are looking for as people have different morals. If you've done your research and those funds match your ethics then that's great. My point is that there is a huge range in how ethical funds are, and the passive ones are at the lower end of that scale. I would suggest you look at the holdings and see for yourself.

Blackavar

Thanks for everyone's input on this.
I have a last couple of questions in order to provide him with the correct info:
1. He has a LISA that he pays £4K into each year. Am I right in thinking that he can pay up to £16K into a S&S ISA in the same tax year? I really hope I haven't misunderstood this.
2. Going back to the 'ethical' theme, does anyone know how the cash is used that is invested in NS&I premium bonds?
Thanks for any input

xylophone

 Going back to the 'ethical' theme, does anyone know how the cash is used that is invested in NS&I premium bonds?

In effect the money invested in PBs is a loan to the government  -  the government pays interest on the loan - the interest is paid out in prizes.

xylophone

He has a LISA that he pays £4K into each year. Am I right in thinking that he can pay up to £16K into a S&S ISA in the same tax year? 

 The total ISA allowance for the tax year is £20,000 which can be split between LISA/stocks and shares ISA/cash ISA/innovative finance ISA as required.

https://www.wealthsimple.com/en-gb/learn/can-you-have-multiple-isa#:~:text=Yes.,to any proportion you like.

Blackavar

Thanks Xylophone - That answers all my questions

A_T

thegentleway said:

A_T said:

thegentleway said:

Passive funds aren't that ethical. If you really want to invest ethically you should consider active funds.

there are plenty of ethical indexes tracked by funds e.g.:
Vanguard ESG Developed World All Cap Equity Index Fund which tracks the FTSE Developed All Cap ex Controversies/Non-Renewable Energy/Vice Products/Weapons Index; or
iShares MSCI World ESG Enhanced UCITS ETF USD which tracks the MSCI World ESG Enhanced Focus NET Index

Yes but screening is just applying broad-brush criteria... and is a rather lazy way to convince yourself your investments are ethical. Obviously, it depends what you are looking for as people have different morals. If you've done your research and those funds match your ethics then that's great. My point is that there is a huge range in how ethical funds are, and the passive ones are at the lower end of that scale. I would suggest you look at the holdings and see for yourself.

Then to be truly ethical you have to examine the practices of each individual company to judge how ethical it really is.

bigadaj

I'd be pretty confident of managing to argue that any company someone would care to propose will breach some form of ethical investment criteria.

thegentleway

A_T said:

thegentleway said:

A_T said:

thegentleway said:

Passive funds aren't that ethical. If you really want to invest ethically you should consider active funds.

there are plenty of ethical indexes tracked by funds e.g.:
Vanguard ESG Developed World All Cap Equity Index Fund which tracks the FTSE Developed All Cap ex Controversies/Non-Renewable Energy/Vice Products/Weapons Index; or
iShares MSCI World ESG Enhanced UCITS ETF USD which tracks the MSCI World ESG Enhanced Focus NET Index

Yes but screening is just applying broad-brush criteria... and is a rather lazy way to convince yourself your investments are ethical. Obviously, it depends what you are looking for as people have different morals. If you've done your research and those funds match your ethics then that's great. My point is that there is a huge range in how ethical funds are, and the passive ones are at the lower end of that scale. I would suggest you look at the holdings and see for yourself.

Then to be truly ethical you have to examine the practices of each individual company to judge how ethical it really is.

Like I say it depends what your ethics are. Some people think nuclear isn’t worth the risk of a potential nuclear disaster, others think it’s greenest way to produce large amounts of energy, whilst others think it’s unethical because of the way uranium is mined and exposes miners to radioactive material... In any case, I don’t think you have to examine every company/industry in detail, some funds offer that service. I’m suggesting it’s worth looking into and considering paying a tiny bit more for the active funds because they tend to do a much better job of investing ethically than the passive screens. If you want to dip your toe and go for passive ESG funds then go for it. It is a bit more ethical and a great first step. 

thegentleway

bigadaj said:

I'd be pretty confident of managing to argue that any company someone would care to propose will breach some form of ethical investment criteria.

Cool! I’m not looking for any arguments so I won’t be playing. I’m just trying (and clearly failing) to encourage investors who are interested in ethics to consider active funds because they are more ethical.