Ethical ISA investment — sanity check appreciated

omossinnit

Ethical ISA investment — sanity check appreciated

I'm 52 with a ~10-15 year horizon. I have £74k sitting in underperforming cash ISAs, backed by £50k in Premium Bonds as a safety buffer. I want to move the ISA money into a stocks and shares ISA — long-term equities. I have hippy tendencies so won't fund weapons, fossil fuels, !!!!!! or gambling.

Most research done via Claude AI so want some human sense-checks.

Quickly ended up on AJ Bell's fund screener, searching ethical global funds. Haven't looked at other platforms.

My shortlist:

• Royal London Global Sustainable Equity M Acc ← current preference
• Janus Henderson Global Sustainable Equity I Acc
• Quilter Investors Ethical Equity R Acc
• Liontrust Sustainable Future Global Growth 2 Net Acc

My questions:

• Is AJ Bell a sound platform choice, or should I look elsewhere?
• Does Royal London Global Sustainable Equity look like a reasonable choice?
• Have I been sceptical enough, or am I missing something obvious?

Thanks in advance for advice on my lucky situation.

dunstonh

With ethical investing, you need to set your ethical filters and then select funds that match your ethics.

So, your selection will be very much a personal thing. There is a difference between sustainable funds and ethical funds. You cannot just assume from the fund name that it meets your objectives.

omossinnit

https://forums.moneysavingexpert.com/discussion/comment/81941528#Comment_81941528

Good point. I did study the content of the funds to see they met my spec.

Albermarle

A J Bell is a perfectly good platform and covers the whole of the market, including ethical funds (but mostly non ethical).

As said you need to check details of funds to see if there is any greenwashing, although I think it has been clamped down on to some extent. Very 'dark green' ethical funds tend to have significantly higher charges.

You may also wish to look at a provider that specialises in this area.

Triodos Bank

masonic

You may wish to consider Scottish Widows Share Dealing (used to be iWeb and part of Lloyds group) as a cheaper alternative, assuming they carry the fund you've selected.

MarkwithaK

As a fellow ethical investor I have money in a Royal London Sustainable scheme and a Liontrust one and they have outperformed other ethical funds I am invested in.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81941804#Comment_81941804

It is possible that they have outperformed, because their interpretation of ethical/sustainable is a bit looser?

InvesterJones

It's definitely all about trying to find fund criteria that match your requirements. Fidelity used to have a screener but they've given up on it I think. It's certainly easier to find funds which apply a filter (exclude weapons, tobacco, gambling, fossil fuels for e.g.) and you can get global indexes screened thusly quite cheaply. (e.g. Vanguard ESG Screened Developed World All Cap Equity Index Fund only has a 0.2% fee)

Going for funds that actively support green or other ethical investments is much more complicated and expensive.

But definitely be careful at looking at past performance - understanding why the fund performed as it did is important - in recent times a lot of 'ethical' funds did very well, but looking into them it's just because they had a higher proportion of tech due to screening out industrials etc. - and they were vulnerable to the rotation out of tech.