Beginner wanting to invest responsibly

MoOwens

Hello, thanks for reading. Long story short, my friend set up a Sipp fund for me on hargreaves lansdown about 10 years ago. It grew to nearly 3k without me ever putting anything in it. He put £50 in it to start it off. 
But the fund closed and now the money is just sitting there for me to reinvest.
I'm v new to this and my instinct is to invest in an actively managed fund with responsible holdings (not even sure I'm using the right terminology!)...
But if my understanding is right, these funds look a bit riskier than if I were to be investing in e.g. Amazon.
The couple of responsible funds that I looked at on HL seem to have had reasonably good performance but the whole thing is making me a bit confused and I'm second guessing myself.
My intention is to make A monthly lodgement in whatever I invest in. All advice welcome

El_Torro

What is a responsible fund? An ethical fund? Something else?

Generally speaking the best thing a beginner can do is invest in a global tracker or multi asset fund. Not the most exciting investment (don’t expect it to grow from £50 to £3,000 in the space of 10 years!) but it’s a tried and tested way of investing and should over the long run comfortably outpace inflation.

I would suggest avoiding individual company shares, this is a very risky way to invest.

tacpot12

I would suggest you look at Vanguard's LifeStrategy 60 Fund as a good all-rounder. If you start investing in that fund, and then, over time, look at all information about it you will know more about why it is a good fund. You can always decide to invest in something else later, but it is important to start investing as soon as you have the funds to do so.  

InvesterJones

Advice is regulated, but we can offer some general guidance. So to establish some facts, we're talking about a SIPP fund choice, and you'd like it to be on HL, and something you can contribute to monthly? Is it going to be 10+ years until you need to access it? Are there any other considerations ('responsible'=?)

There are cheaper platforms than HL, especially as the investment size increases, so it's worth considering alternatives if not now, then at some point in the future. Platform choice doesn't make any difference to fund performance so it's a gain for free. But if you want to stay on HL then there are no restrictions to fund choice. 

If considering >10 years timescale then you can probably accept 100% equities and the expected higher return compared to funds like lifestrategy 60% which are only ~60% equities (these are better suited to people with a shorter timescale). For a 'set and forget' strategy then going for a single, global index tracker, fund will give you a lot of diversification and therefore no need to manage and change around. There's no need to go for an active fund in this case, so you can also benefit from cheap fees.

For monthly payments it's probably cheaper to stick with OIECs/Unit Trusts (Funds in HL speak) rather than exchange traded funds. On HL go to the shares & funds > Funds page, select Sector: Global, Unit type: Accumulation, Fund type: Tracker. to see a shortlist. You can click on the Charges header to sort by fees and then compare the results. Some other pointers: Funds with '100' in the name track only a shortlist of worldwide stocks, usually the largest companies. 'International' and 'Ex-uk' tend to avoid UK companies, so if you don't want that look for the ones with 'world' for example Fidelity Index World (is actually developed world), and HSBC FTSE All-world Index (is all-world: developed + emerging).

If you want an environmental/social/governance screened (eg. somewhat 'ethical') fund then look for ESG - but look at the factsheets to check what the screening actually entails.

dunstonh

'm v new to this and my instinct is to invest in an actively managed fund with responsible holdings (not even sure I'm using the right terminology!)...
But if my understanding is right, these funds look a bit riskier than if I were to be investing in e.g. Amazon.

Investing in Amazon is higher risk than investing in a fund.  You have it the wrong way around.   A multi-asset fund can hold 20,000 companies.    Investing in Amazon is just one.

The couple of responsible funds that I looked at on HL seem to have had reasonably good performance but the whole thing is making me a bit confused and I'm second guessing myself.

Responsible investing generally results in lower returns in most cumulative periods than conventional investments.  They are also typically more expensive due to the screening that goes on.  So, you are putting your money where your mouth is.

You also need to decide what style of responsible you are after.  Ethical (personalised screening), ESG criteria (focusing on ESG criteria), sustainability and/or responsible (more generic and not as restrained).

I would suggest you look at Vanguard's LifeStrategy 60 Fund as a good all-rounder.

VLS60 is not a responsible investment.   

Beddie

As a place to start, have a read though this page 

https://www.hl.co.uk/funds/fund-sectors/responsible-investing

It has some information and a few funds to look at. Do not take these as recommendations, but having a look at them will give you an idea of where to go with this.

RolandFlagg

Go onto Youtube and watch every Ben Felix video you can.

Albermarle

Long story short, my friend set up a Sipp fund for me on hargreaves lansdown about 10 years ago. It grew to nearly 3k without me ever putting anything in it. He put £50 in it to start it off. 

Hopefully you have another pension fund building up somewhere ( at work ?) 

£50 to £3K seems incredible, even for a high growth fund over 10 years. What was it ?

penners324

What about your other pensions? Worth checking how they're invested as well

[Deleted User]

Don't do what I did, someone in here said it would be a good idea to invest in mobico last year so I put 20k into a stocks and shares ISA and currently 50% down

masonic

[Deleted User] said:

Don't do what I did, someone in here said it would be a good idea to invest in mobico last year so I put 20k into a stocks and shares ISA and currently 50% down

Someone here said that? I couldn't find a post about investing in that company (other than your own) but perhaps it was deleted by the forum team for being a terrible suggestion or it was sent to you in a PM by someone knowing they'd get shot down in flames for suggesting something as wreckless as that in a public post.