Ethical Investing: A Quick Guide

Ethical investing is a hot topic at the moment, with many reports suggesting that it is on the rise amongst investors in the UK.

To help bust some of the myths associated with ethical investing, we’ve written up a quick guide on some things you will need to think about before you consider investing with ethics in mind.

How do Ethical Investments Work?

Investing ethically means to invest with social, political and environmental responsibility in mind, or putting your money where your beliefs are. This is a movement that has grown in popularity over the years. According to a biennial report released by the Global Sustainable Investment Association, ethical assets had grown by 25% in 2016.

There are many types of ethical investments and varying motivations between them. For example, ethical funds are usually ranked by a “green” scale, where a “light green” ethical fund has a more relaxed approach to its investment criteria, and a “dark green” fund will have a stricter set of guidelines.

Do Ethical Investments See Poorer Returns?

When considering ethical investments, you may feel that it’s not possible to have the best of both worlds. However, poorer returns are not necessarily the case when it comes to investing ethically.

There are many ethical funds that have performed just as well as other funds, meaning that it is possible to see success as well as make the world a better place.

However, it should always be noted that every investment, no matter its ethical stance, can fall as well as rise. This means that you may get back less than the amount that you invested in the first place, and no investment comes without risk, even if your investment avoids certain industries.

How Can I Get Started?

It’s important to look at your own preferences for ethical investing as well as your attitude to risk before you get started. It may be worth looking into funds with the help of a local financial adviser, who can help you to choose the most beneficial ethical investments in line with your principles and beliefs.

If you’re looking for financial advice regarding ethical investments and funds, talk to our financial advice team. Please call on 01926 492406 or email us at enquiries@klofinancialservices.com to make an appointment.